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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7324 (-48 or -0.65%)
The ASX edged lower but in truth it was a week of low volatility and spent in a sideways range.
VOLATILITY ALERTS:
Tues 09:30 – CPI q/q & y/y
For a move higher we would like to see the ASX hold above 7310. Should this occur, a move above 7385 should be expected; and if momentum is strong, we cannot rule out moves to 7465 and 7555.
Failure to hold above 7310 means a potential move into 7215. 7135 is the next support level down if 7215 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7030.
EUROPE
DAX (40) – 15904 (+100 or +0.63%)
The DAX moved higher as bulls look to maintain upside momentum for a chance at new ATHs.
VOLATILITY ALERTS:
Fri – German Prelim CPI m/m
For the DAX to move higher we would like to see it hold above 15820. Should this occur then 15970 is the next level ahead. If upside momentum is strong then 16090 and 16270 cannot be ruled out.
To the downside, should we not see it hold above 15820, we will look for a move into support at 15650. A strong break and close below this handle and 15515 is the next level down. If downside pressure mounts then 15325 cannot be ruled out.
US
S&P 500 – 4131 (-15 or -0.36%)
The SPX closed ever so slightly lower but didn’t move enough for our levels to change this week.
VOLATILITY ALERTS:
Tues 10:00 – CB Consumer Confidence
Thurs 08:30 – Advanced GDP q/q & Unemployment Claims
Fri 08:30 – Core PCE price index m/m and Employment Cost index m/m
For a move higher we would like to see the S&P hold above 4095. Should this occur, we will look for a move through 4150; and if momentum is strong, we cannot rule out moves to 4215 and 4320.
If we cannot hold above 4095, we could see this market move down into 3965. A break of this level, however, may result in a quick move down to 3915; and if momentum to the downside remains strong we may see a fast move back down to 3810.
FOREX
AUD/USD – 0.6692 (-17 or -0.25%)
The Aussie Dollar remained within its range and our levels remain the same.
VOLATILITY ALERTS:
Tues 09:30 – CPI q/q & y/y
For a move higher this week we would like to see it hold above 0.6670. We will then be targeting a move through 0.6715. If we see a strong break and close above this level then we can’t rule out a move to 0.6825. Should momentum to the upside be really strong then 0.6870 could be targeted.
If this market cannot hold above 0.6670, we could see a move down into 0.6585. A strong break of this level may result in a move into 0.6525, however, any weakness below this level could see a sharp drop into 0.6385.
EUR/USD – 1.0989 (-5 or -0.05%)
The Euro almost closed completely flat and is another market that sees levels remain the same.
VOLATILITY ALERTS:
Fri – German Prelim CPI m/m
For a move higher we would like to see the Euro hold above 1.0940. Should this occur we should see a move above 1.1115. A break of this level could see this market rally further to 1.1215 and 1.1385.
If the EURO cannot hold above 1.0940 we will see a move into 1.0760. A strong break of this level may result in a move into 1.0600, however, any weakness below this level could see a move into 1.0470.
GBP/USD – 1.2441 (+28 or +0.23%)
The Cable edged slightly higher as UK inflation appears stickier than expected.
For a move to the upside, we would like to see Cable hold above 1.2400 before a break higher into 1.2600. If this market can see a strong close above this level we may then see a strong pushback into 1.2755. If upside momentum is really strong then a move back into 1.2975 can’t be ruled out.
Should we fail to hold above 1.2400, we will look for a move down to 1.2275. A break below this level however could see Cable further depreciate to 1.2145 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1930.
USD/JPY – 134.12 (+39 or +0.29%)
The Dollar Yen is facing some headwinds despite edging higher on the week.
VOLATILITY ALERTS:
Tues 10:00 – CB Consumer Confidence
Thurs 08:30 – Advanced GDP q/q & Unemployment Claims
Thurs & Fri – BOJ Outlook Report, Press Conference, and Monetary Policy Statement
Fri 08:30 – Core PCE price index m/m and Employment Cost index m/m
For a move to the upside, we must now see this market hold above 132.50. Should this occur, we will look for a move into 134.50. And if upside momentum is strong, we could see a move higher into 137.55 and potentially 139.10.
If we cannot hold above 132.50, we could see a move back to test 131.40 before a pause to the downside. A break below this level may result in a sharp move lower into 129.50; and any further breaks to the downside may see a bigger move into 127.20.
COMMODITIES
GOLD – 1982 (-22 or -1.1%)
Gold remains jumpy as attempts to retest the highs fell short.
VOLATILITY ALERTS:
Fri 08:30 – Core PCE price index m/m and Employment Cost index m/m
For a move higher we need to see this market close above 2000. Should this occur we could see a move into 2014; and any break of this level could see a stronger move into 2050. If momentum is strong then 2075 cannot be ruled out.
If Gold cannot close above 2000, we can see a move down to 1960. A break below this level could see a move lower into 1910; and if momentum is very strong to the downside we could see a move to 1870.
CRYPTOS
BITCOIN – 27643 (-2620 or -8.66%)
BTC faded its recent upside breakout as UK inflation and Coinbase potentially moving away from the US weighed on sentiment.
For a move higher we must now see this market close above 28000. Should this occur we could see a move into 31050 before retesting 32590. If upside momentum is really strong then we can’t rule out 36850.
Failure to close above 28000 could see a move into 25875. If selling pressure takes control then we could see a move down to 23675. A close below this level and 21715 can’t be ruled out. 20000 is the more psychological handle below that.
