This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up to the minute market analysis see our live trading room.
INDICES
AUSTRALASIA
ASX – 7348 (-149 or -1.99%)
The ASX edged lower and closed below recent consolidation – is this the start of a leg lower?
VOLATILITY ALERTS:
Mon 11:30 – Nab Business Confidence
Thurs 11:30 – Employment Change
For a move higher we would like to see the ASX close above 7400. Should this occur, a move into 7500 could be expected; and if momentum is strong we cannot rule out moves to 7600 and 7730.
Failure to close above 7400 means a potential move back into 7272. 7202 is the next support level down if 7091 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 7000.
EUROPE
DAX – 15557 (-228 or -1.44%)
The DAX was rejected again at all-time highs and closed the week below a key level – new direction established? We will discuss this further in our LIVE CHAT ROOM.
VOLATILITY ALERTS:
For the DAX to continue its move higher we would like to see it close above 15800. Should this occur then 16000 is the next level ahead. If upside momentum is strong then 16157 cannot be ruled out.
To the downside, should we not see it close above 15800, we will look for a move into support at 15500. A strong break and close below this handle and 15345 is the next level down. If downside pressure mounts then 15050 cannot be ruled out.
US
S&P 500 – 4460 (-77 or -1.7%)
The S&P is back to test the ascending trend line – will the bulls hold firm again?
VOLATILITY ALERTS:
Tues 22:30 – Core CPI M/m & Y/y
Thurs 22:30 – Retail Sales M/m
For a move higher we would like to see the S&P close above 4500. Should this occur, we will look for a move to 4531, and if momentum is very strong we cannot rule out moves to 4550.
If we cannot hold above 4500, we could see this market move down into 4450. A break of this level however may result in a quick move down to 4421, and if momentum to the downside remains strong we may see a fast move back down to 4375.
FOREX
AUD/USD – 0.7351 (-97 or -1.3%)
Unsurprisingly the Aussie Dollar slowed down following the recent squeeze higher but can it hold onto key support from here?
VOLATILITY ALERTS:
Mon 11:30 – Nab Business Confidence
Thurs 11:30 – Employment Change
For a move higher this week, we would like to see it close above 0.7423. We will then be targeting a move back into 0.7500 where we may see a pause. If we see a strong break and close above this level then we can’t rule out a move to 0.7561.
If this market cannot close above 0.7423, we could see a move down into 0.7343. A strong break of this level may result in a move into 0.7250, however, any weakness below this level could see a sharp drop into 0.7065.
EUR/USD – 1.1810 (-68 or -0.57%)
A rather non-event ECB reaction from the Euro despite ‘tapering’ commencement – the consensus appeared to be met.
VOLATILITY ALERTS:
Tues 22:30 – U.S. Core CPI M/m & Y/y
Fri 19:00 – EU Core CPI M/m
For a move higher we would like to see the Euro close above 1.1833. Should this occur we could see a move into 1.1925 before a pause. A break of this level could see this market rally further to 1.2000; and if momentum is very strong, 1.2052 cannot be ruled out.
If the EURO cannot close above 1.1833, we could see a move into 1.1738. A strong break of this level may result in a move into 1.1615, however, any weakness below this level could see a sharp drop into 1.1500.
GBP/USD – 1.3830 (-27 or -0.19%)
VOLATILITY ALERTS:
Weds 16:00 – Core CPI M/m
Fri 16:00 – Retail Sales M/m
The Cable edged slightly lower for the week and continues to mean revert around key levels for now.
For a move to the upside, we would like to see Cable hold 1.3755 before a break higher through 1.3865. If this market can see a strong close above this level we may then see a strong push back into 1.4000.
Should we fail to hold above 1.3755, we will look for a move down to 1.3666. A break below this level however could see Cable further depreciate to 1.3620 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3534.
USD/JPY – 109.93 (+24 or +0.22%)
Another choppy week for the Dollar Yen as it continues to be indecisive – levels remain unchanged.
VOLATILITY ALERTS:
Tues 22:30 – Core CPI M/m & Y/y
Thurs 22:30 – Retail Sales M/m
For a move to the upside, we must now see this market close above 109.94. Should this occur we will look for a retest of 110.38, and if upside momentum is strong we could see a move higher into 111 and potentially 111.70.
If we cannot close above 109.94, we could see a move back to test 109.68 before a pause to the downside. A break below this level may result in a sharp move lower into 109.21, and any further breaks to the downside may see a bigger move into 107.81.
COMMODITIES
GOLD – 1787 (-40 or -2.19%)
Gold got sold off early in the week but again has found key support – will it continue to hold here?
For a continued move higher we need to see this market hold above 1786. Should this occur we need to see a move back into 1814; and any break of this level could see a stronger move into 1832. If momentum is really strong then 1850 cannot be ruled out.
If Gold cannot hold above 1786, we will look for a move back down to 1740. A break below this level could see a move lower into 1720, and if momentum is very strong to the downside we could see a move to 1678.
CRYPTOS
BITCOIN – 50825 (+4652 or +10.08%)
The 50k handle looks to have broken over the weekend as the bulls look to take another leg higher.
For a move higher we must now see this market hold above 50000. Should this occur we could see a move into 55000 before retesting 57545. If upside momentum is really strong then we can’t rule out 59068.
Failure to hold above 50000 could see a move down to 47500. If selling pressure takes control then we could see a move down to 44000. A close below this level and 40000 can’t be ruled out.
