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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7135 (-50 or -0.7%)
A ripping Friday saw the ASX almost close the week flat as volatility remains high.
VOLATILITY ALERTS:
Mon 10:30 – Retail Sales M/m
Tues 13:30 – RBA Interest Rate Decision
Weds 10:30 – GDP Q/q
Thurs 10:30 – Building Approvals M/m
For a move higher we would like to see the ASX hold above 7091. Should this occur, a move into 7202 could be expected; and if momentum is strong we cannot rule out moves to 7272 and 7400.
Failure to hold above 7091 means a potential move back into 7000. 6740 is the next support level down if 6894 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6640.
EUROPE
DAX – 14616 (-373 or -2.49%)
Things were getting nasty for the DAX but how big will Friday’s bounce be moving forward?
VOLATILITY ALERTS:
Tues 17:00 – Retail Sales M/m
Tues 18:55 – Markit Manufacturing PMI
Tues 23:00 – CPI Y/y & M/m
Weds 18:55 – Unemployment Rate
Thurs 18:55 – Markit Services and Composite PMI
For the DAX to move higher we would like to see it close above 14780. Should this occur then 15050 is the next level ahead. If upside momentum is strong then 15345 and 15585 cannot be ruled out.
To the downside, should we not see it close above 15050, we will look for a move into support at 14779. A strong break and close below this handle and 14425 is the next level down. If downside pressure mounts then 14140 cannot be ruled out.
US
S&P 500 – 4375 (+31 or +0.71%)
An astonishing rally by US equities from mid-way through Thursday’s session till Friday’s close saw the SPX close the week higher, despite the Ukraine crisis.
VOLATILITY ALERTS:
Weds 01:00 – ISM Manufacturing PMI
Fri 01:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move higher we would like to see the S&P hold above 4375. Should this occur, we will look for a move to 4432; and if momentum is strong we cannot rule out moves to 4480 and 4555.
If we cannot hold above 4375, we could see this market move down into 4330. A break of this level however may result in a quick move down to 4285, and if momentum to the downside remains strong we may see a fast move back down to 4233.
FOREX
AUD/USD – 0.7227 (+49 or +0.64%)
The Aussie Dollar moved higher amongst higher volatility than we usually see on this market.
VOLATILITY ALERTS:
Mon 10:30 – Retail Sales M/m
Tues 13:30 – RBA Interest Rate Decision
Weds 10:30 – GDP Q/q
Thurs 10:30 – Building Approvals M/m
For a move higher this week, we would like to see it hold above 0.7225. We will then be targeting a move through 0.7250. If we see a strong break and close above this level then we can’t rule out a move to 0.7283.
If this market cannot hold above 0.7225, we could see a move down into 0.7170. A strong break of this level may result in a move into 0.7105, however, any weakness below this level could see a sharp drop into 0.7065.
EUR/USD – 1.1272 (-48 or -0.42%)
The Euro posted new yearly lows but joined in with other markets as flow flew out of havens on Friday.
VOLATILITY ALERTS:
Weds 20:00 – EU Core CPI & CPI M/m and Y/y
For a move higher we would like to see the Euro close above 1.1345. Should this occur we could see a move into 1.1425. A break of this level could see this market rally further to 1.1500.
If the EURO cannot close above 1.1345, we will see a move back into 1.1225. A strong break of this level may result in a move into 1.1155, however, any weakness below this level could see a sharp drop into 1.1110.
GBP/USD – 1.3409 (-185 or -1.36%)
The Cable sold off aggressively on Thursday but did bounce at key support – can it remain above its current yearly lows?
For a move to the upside, we would like to see Cable close above 1.3435 before a break higher through 1.3535. If this market can see a strong close above this level we may then see a strong push back into 1.3620. If upside momentum is really strong then a move back into 1.3670 can’t be ruled out.
Should we fail to close above 1.3435, we will look for a move down to 1.3290. A break below this level however could see Cable further depreciate to 1.3198 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3055.
USD/JPY – 115.52 (+49 or +0.43%)
The Dollar Yen edged higher as more flow came into the USD haven v JPY haven this week – will that continue?
VOLATILITY ALERTS:
Weds 01:00 – ISM Manufacturing PMI
Fri 01:00 – ISM Non-Manufacturing PMI
Fri 23:30 – Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 114.70. Should this occur we will look for a move into 115.55, and if upside momentum is strong we could see a move higher into 116.10 and potentially 117.
If we cannot hold above 114.70, we could see a move back to test 114.23 before a pause to the downside. A break below this level may result in a sharp move lower into 113.20, and any further breaks to the downside may see a bigger move into 112.25.
COMMODITIES
GOLD – 1888 (-9 or -0.47%)
Remarkably, Gold ended the week lower after a giant reversal on Thursday but have we seen the end of that recent high? We don’t think so.
For a move higher we need to see this market hold above 1875. Should this occur we could see a move back into 1905, and any break of this level could see a stronger move into 1930. If momentum is really strong then 1955 cannot be ruled out.
If Gold cannot hold above 1875, we will look for a move back down to 1850. A break below this level could see a move lower into 1830, and if momentum is very strong to the downside we could see a move to 1815.
CRYPTOS
BITCOIN – 38975 (-1011 or -2.53%)
BTC endured another volatile week trading with the overall market risk-off/on sentiment- has the ‘digital gold’ narrative now expired?
For a move higher we must now see this market close above 39839. Should this occur we could see a move into 43233 before retesting 44000. If upside momentum is really strong then we can’t rule out 47000.
Failure to close above 39839 could see a move down to 35050. If selling pressure takes control then we could see a move down to 32300. A close below this level and 29444 can’t be ruled out, maybe even a 27434 print.
