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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7188 (-129 or -1.76%)
A global risk-off sentiment saw equities move lower throughout the week and the ASX ended up retesting it’s recent lows.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
For a move higher we would like to see the ASX close above 7200. Should this occur, a move into 7272 could be expected; and if momentum is strong we cannot rule out moves to 7400 and 7500.
Failure to close above 7200 means a potential move back into 7091. 7000 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 6915.
EUROPE
DAX – 15239 (-324 or -2.08%)
The DAX found another bounce at key support to finish the week – can it continue to hold?
VOLATILITY ALERTS:
Thurs 20:00 – EU Retail Sales
For the DAX to continue its move higher we would like to see it hold above 15050. Should this occur then 15345 is the next level ahead. If upside momentum is strong then 15585 and 15800 cannot be ruled out.
To the downside, should we not see it hold above 15050, we will look for a move into support at 14805. A strong break and close below this handle and 14610 is the next level down. If downside pressure mounts then 14410 cannot be ruled out.
US
S&P 500 – 4362 (-88 or -1.98%)
A vicious bounce on Friday after what was looking like quite an ugly week. Can the dip-buying be sustained?
VOLATILITY ALERTS:
Weds 00:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move higher we would like to see the S&P close above 4375. Should this occur, we will look for a move to 4420, and if momentum is very strong we cannot rule out moves to 4450.
If we cannot close above 4375, we could see this market move down into 4352. A break of this level however may result in a quick move down to 4300, and if momentum to the downside remains strong we may see a fast move back down to 4265.
FOREX
AUD/USD – 0.7259 (+2 or +0.03%)
A very flat week for the Aussie Dollar so our levels remain unchanged.
VOLATILITY ALERTS:
Tues 14:30 – RBA Interest Rate Decision
For a move higher this week, we would like to see it close above 0.7342. We will then be targeting a move back into 0.7423 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 0.7500.
If this market cannot close above 0.7342, we could see a move down into 0.7250. A strong break of this level may result in a move into 0.7065, however, any weakness below this level could see a sharp drop into 0.7000.
EUR/USD – 1.1592 (-127 or -1.08%)
VOLATILITY ALERTS:
Thurs 20:00 – EU Retail Sales
Fri 23:30 – Non-Farm Payrolls
A more hawkish Fed v a more dovish ECB sees the Euro take out its yearly lows – a continuation of the downtrend is looking likely.
For a move higher we would like to see the Euro close above 1.1615. Should this occur we could see a move into 1.1738 before a pause. A break of this level could see this market rally further to 1.1833; and if momentum is very strong, 1.1925 cannot be ruled out.
If the EURO cannot close above 1.1615, we could see a move into 1.1570. A strong break of this level may result in a move into 1.1500, however, any weakness below this level could see a sharp drop into 1.1425.
GBP/USD – 1.3545 (-124 or -0.91%)
LIke the Euro the Cable also aggressively broke below its yearly lows – they found a bounce on Friday but is the downside direction now set?
VOLATILITY ALERTS:
Fri 23:30 – Non-Farm Payrolls
For a move to the upside, we would like to see Cable hold 1.3545 before a break higher through 1.3620. If this market can see a strong close above this level we may then see a strong push back into 1.3666. If upside momentum is really strong then a move back into 1.3755 can’t be ruled out.
Should we fail to hold above 1.3545, we will look for a move down to 1.3435. A break below this level however could see Cable further depreciate to 1.3290 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3198.
USD/JPY – 111.07 (+34 or +0.31%)
A huge midweek turnaround saw the Dollar Yen give up most of its strong early week gains. A big test for USD bulls awaits this week.
VOLATILITY ALERTS:
Weds 00:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 111. Should this occur we will look for a retest of 111.7, and if upside momentum is strong we could see a move higher into 112.25 and potentially 113.18.
If we cannot hold above 111, we could see a move back to test 110.38 before a pause to the downside. A break below this level may result in a sharp move lower into 109.94, and any further breaks to the downside may see a bigger move into 109.68.
COMMODITIES
GOLD – 1760 (+10 or +0.57%)
Gold inched slightly higher but the overall direction still appears to be to the downside.
VOLATILITY ALERTS:
Fri 23:30 – Non-Farm Payrolls
For a move higher we need to see this market hold above 1756. Should this occur we need to see a move back into 1786; and any break of this level could see a stronger move into 1814. If momentum is really strong then 1832 cannot be ruled out.
If Gold cannot hold above 1756, 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 – 47944 (+5354 or +12.57%)
Bitcoin posted an impressive gain largely thanks to a strong end to the week as ‘risk-on’ crept back across global markets.
For a move higher we must now see this market hold above 47000. Should this occur we could see a move into 50000 before retesting 55000. If upside momentum is really strong then we can’t rule out 59000.
Failure to hold above 47000 could see a move down to 44000. If selling pressure takes control then we could see a move down to 42000. A close below this level and 40000 can’t be ruled out.
