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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6685 ( -75 or -1.11% )
The ASX continues to remain range bound and we are on alert for a breakout this week.
VOLATILITY ALERTS:
Thu 11:30 – Unemployment Rate
For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a move into 6804, and if momentum to the upside is very strong we cannot rule out a move to 6850 and 6960.
If the ASX cannot hold above 6682, we will look for a move back down to 6550. A strong break and close below this level however could see the ASX retest of 6500, and if downside momentum is very strong, we could see a move down to 6435.
EUROPE
DAX – 13766 ( -321 or -2.28% )
The DAX struggled to consolidate the gains of the previous week and we will discuss what this means in our MEMBER PORTAL.
VOLATILITY ALERTS:
Fri 19:30 – Flash Manufacturing PMI, Flash Services PMI
For a continued move to the upside we must now see the DAX close above 13800. Should this occur, we will look for a strong move up into 14210, and if momentum remains strong a push back higher into 14450.
If the DAX fails to close above 13800, we may see a retest back down into the key level of 13050. A close below this level is likely to see a retest of 13520; however if momentum is very strong to the downside we cannot rule out a move to 13266.
US
SP500 – 3753 ( -77 or -2.01% )
The S&P goes into a very important week having closed the week poorly.
NOTE: Monday is a public holiday in the US (Martin Luther King Day)
VOLATILITY ALERTS:
Thu 00:00 – President Elect Biden Speaks
Fri 00:30 – Philly FED Manufacturing Index
Sat 01:45 – Flash Manufacturing PMI
For a move higher we would like to see the S&P close above 3780. Should this occur, we will look for a move to 3850; and if momentum is very strong we cannot rule out a move to 3900.
If we cannot close above 3780, we could see this market move lower into 3733. A break of this level however may result in a quick move down to 3694; and if momentum to the downside remains strong we may see a fast move down to 3655.
FOREX
AUD/USD – 0.7702 ( -62 or -0.8% )
Like the ASX, the Aussie dollar is also sideways and we are watching this market closely. We will again be discussing this market this week in the LIVE CHAT ROOM.
VOLATILITY ALERTS:
Thu 11:30 – Unemployment Rate
For a move higher, we would first like to see the AUD hold above 0.7662. Should this occur we will look for a move into 0.7750, and if upside momentum remains very strong we cannot rule out a move to 0.7823 and 0.7997 before a pause.
If the AUD cannot hold above 0.7662, we will look for this market to break lower through 0.7617. A break and close below this level could see a sharp decline into 0.7550; and if momentum to the downside remains strong we cannot rule out a move into 0.7489.
EUR/USD – 1.2075 ( -38 or -0.31% )
The Euro continues to be sold off however can this market find buyers this week?
VOLATILITY ALERTS:
Thu 23:45 – ECB Interest Rate Announcement
Fri 00:30 – ECB Press Conference
Fri 20:00 – Flash Manufacturing PMI, Flash Services PMI
For a move higher we would like to see the EURO close above 1.2120. Should this occur we could see a retest of 1.2256. A break of this level could see this market rally further and if momentum is very strong, we would be on the lookout for a move to 1.2300.
If the EURO cannot close above 1.2120, we could see a fast move down into 1.2002 before a pause. A strong break of this level may result in a move into 1.1980, however any weakness below this level could see a sharp drop into 1.1925.
GBP/USD – 1.3584 ( +21 or +0.15% )
Cable remains at a big juncture and this market is also poised for an important move.
VOLATILITY ALERTS:
Tue 00:30 – BoE Governor Bailey Speaks
Fri 04:00 – BoE Governor Bailey Speaks
Fri 18:00 – Retail Sales (monthly)
Fri 20:30 – Flash Manufacturing PMI, Flash Services PMI
For a move to the upside now, we would like to see Cable hold above 1.3277. If this market can hold above this level we may then see a strong push into 1.3410 before another pause. A break through this level sets Cable up for a move up to 1.3550.
Should we fail to hold above 1.3550, we will look for a move down to 1.3410. A break below this level however could see Cable further depreciate to 1.3277 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3161.
USD/JPY – 103.88 ( -8 or -0.08% )
The YEN remained confined to a small loss last week and as such our levels this week remain unchanged.
VOLATILITY ALERTS:
Thu 12:30 – BoJ Interest Rate Announcement
For a move to the upside we must now see this market hold above 103.80. Should this occur we will look for a push into 105.50, and if momentum is very strong we cannot rule out a move higher to 106.92.
If we cannot hold above 103.80, we could see another move back down into 103.21. A break below this level may result in further downside to 102.80; and any further breaks to the downside may trigger a bigger move into 100.65.
COMMODITIES
GOLD – 1827 ( -22 or -1.19% )
Gold is again under selling pressure however sellers have yet to do any major damage to the downside. We will be discussing this market in more detail in the MEMBER PORTAL.
For a continued move higher we must now see this market close above 1830. Should this occur we would then need to see a strong break back above through 1850. Should this occur we could see further upside into 1900; and if momentum is very strong we may see a retest of 1920.
If Gold cannot close above 1830, we will look for a move back down to 1800. A break below this level could see a move lower into 1750; and if momentum is very strong to the downside we could see a move to 1726.
