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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7032 (+66 or +0.95%)
The ASX is trading slightly higher this week finding support at its lows.
VOLATILITY ALERTS:
Tues 11:30 – AUD RBA Meeting Minutes
Thur 11:30 – AUD Unemployment Rate
For a move higher, we would like to see the ASX close above 7032. Should this occur, a move above 7093 should be expected, and if momentum is strong, we cannot rule out moves to 7112 and 7196.
Failure to close above 7032 means a potential move into 6991. 6854 is the next support level down if 6775 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6717.
EUROPE
DAX (30) – 15180 (+5 or +0.03%)
After creating an all time high 2 months ago the DAX has moved sideways with a slightly downward trend. Will the support turn around and test the highs again?
VOLATILITY ALERTS:
Tues 19:00 – EUR Economic Sentiment
Wed 20:00 – EUR CPI
For the DAX to move higher, we would like to see it close above 15181. Should this occur, then 15243 is the next level ahead. If upside momentum is strong, then 15396 and 15600 cannot be ruled out.
To the downside, should we not see it hold above 15181, we will look for a move into support at 15087. A strong break and close below this handle and 14974 is the next level down. If downside pressure mounts, then 14672 cannot be ruled out.
S&P 500 – 4342 (+65 or +1.52%)
The SPX is up over 1% this past week.
VOLATILITY ALERTS:
Tue 23:30 – USD Retail Sales
Wed 23:30 – USD Building Permits
Thur 23:30 – USD Jobless Claims
Fri 01:00 – USD Existing Home Sales
For a move higher, we would like to see the S&P hold above 4342. Should this occur, we will look for a move through 4412. And if momentum is strong, we cannot rule out moves to 4480 and 4518.
If we cannot hold above 4342, we could see this market move down into 4245 A break of this level, however, may result in a quick move down to 4144. And if momentum to the downside remains strong, we may see a fast move back down to 4118.
FOREX
AUD/USD – 0.6316 (-45 or -0.71%)
The AUDUSD has closed the week continuing its downward pressure. Will the momentum continue?
VOLATILITY ALERTS:
Tues 11:30 – AUD RBA Meeting Minutes
Thur 11:30 – AUD Unemployment Rate
Tue 23:30 – USD Retail Sales
Wed 23:30 – USD Building Permits
Thur 23:30 – USD Jobless Claims
Fri 01:00 – USD Existing Home Sales
For a move higher this week, we would like to see it hold above 0.6316. We will then be targeting a move through 0.6327. If we see a strong break and close above this level, then we can’t rule out a move to 0.6426. Should momentum to the upside be really strong, then 0.6457 could be targeted.
If this market cannot hold above 0.6316 we could see a move down to 0.6274. A strong break of this level may result in a move into 0.6214 however, any weakness below this level could see a sharp drop into 0.6167.
EUR/USD – 1.0523 (-43 or -0.41%)
The EURUSD has continued to move lower keeping to its downtrend channel, one of the longest one direction trends the EURO has seen in many years.
VOLATILITY ALERTS:
Tues 19:00 – EUR Economic Sentiment
Wed 20:00 – EUR CPI
Tue 23:30 – USD Retail Sales
Wed 23:30 – USD Building Permits
Thur 23:30 – USD Jobless Claims
Fri 01:00 – USD Existing Home Sales
For a move higher, we would like to see the Euro close above 1.0523. Should this occur, we should see a move above 1.0579. A break of this level could see this market rally further to 1.0754 and 1.0773.
If the EURO cannot close above 1.0523, we will see a move into 1.0519. A strong break of this level may result in a move into 1.0411, however, any weakness below this level could see a move into 1.0369.
GBP/USD – 1.2151 (-66 or -0.54%)
Following a similar trend to the EURUSD, GU has seen a 0.50% drop.
VOLATILITY ALERTS:
Tues 17:00 – GBP Unemployment Rate
Wed 17:00 – GBP Inflation Rate
Fri 17:00 – GBP Retail Sales
Tue 23:30 – USD Retail Sales
Wed 23:30 – USD Building Permits
Thur 23:30 – USD Jobless Claims
Fri 01:00 – USD Existing Home Sales
For a move to the upside, we would like to see Cable hold above 1.2151 before a break higher into 1.2176. If this market can see a strong close above this level, we may then see a strong pushback into 1.2243. If upside momentum is really strong, then a move back into 1.2346 can’t be ruled out.
Should we fail to hold above 1.2151, we will look for a move down to 1.2129. A break below this level, however, could see Cable further depreciate to 1.2035 by the week’s end. And if momentum is very weak, we cannot rule out a move to 1.2000.
USD/JPY – 149.48 (+31 or +0.21%)
The USDJPY closed slightly higher this week. With the BoJ considering taking action, how much further will the trend go?
VOLATILITY ALERTS:
Thur 10:50 – JPY Balance of Trade
Fri 10:40 – JPY Inflation Rate
Tue 23:30 – USD Retail Sales
Wed 23:30 – USD Building Permits
Thur 23:30 – USD Jobless Claims
Fri 01:00 – USD Existing Home Sales
For a move to the upside, we must now see this market close above 149.15. Should this occur, we will look for a move into 150.133, and if the upside momentum is strong, we could see a move higher into 151.00 and potentially 152.00.
If we cannot close above 149.15, we could see a move back to test 148.92 before a pause to the downside. A break below this level may result in a sharp move lower into 148.06, and any further breaks to the downside may see a bigger move into 147.59.
COMMODITIES
GOLD – 1921 (+74 or +4.01%)
GOLD dropped more than 4% the previous week, and has regained this whole amount in the past week.
For a move higher, we need to see this market close above 1921. Should this occur we could see a move into 1944; and any break of this level could see a stronger move into 1981. If momentum is strong, then 1988 cannot be ruled out.
If Gold cannot close above 1921, we can see a move down to 1892 A break below this level could see a move lower into 1866 and if momentum is very strong to the downside, we could see a move to 1839.
CRYPTOS
BITCOIN – 27249 (-673 or -2.41%)
Bitcoin is trading at its 12 month average price of 27,000 forming a big sideways range.
For a move higher, we must now see this market close above 28000. Should this occur, we could see a move into 30000 before retesting 31000. If the upside momentum is really strong, then we can’t rule out 33000.
Failure to close above 27000 could see a move into 25000. If selling pressure takes control, then we could see a move down to 23000. A close below this level and 22000 can’t be ruled out. 20000 is the more psychological handle below that.
