Market Brief


DAX slips below 24,000 as earnings and ECB policy cloud outlook

With German corporate results under pressure and central-bank commentary remaining cautious, is the DAX building into a larger breakdown under mounting risk? Could the ongoing macro uncertainties trigger a sharper move lower given the fragile backdrop?

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 –  8865 (-208 or -2.29%)

ASX finished lower this week (-208 / -2.29%), signaling strong bearish momentum.

VOLATILITY ALERTS:

Mon 09:00 – S&P Global Manufacturing PMI (Oct) – AUD

Tue 14:30 – RBA Interest Rate Decision – AUD

Thu 11:30 – Balance of Trade (Sep) – AUD

For a move to the upside, we must now see this market close above 9096. Should this occur, we will look for a move into 9118, and if the upside momentum is strong, we could see a move higher into 9141 and potentially 9186.

If we cannot close above 9050, we could see a move back to test 9028 before a pause to the downside. A break below this level may result in a sharp move lower into 9005, and any further breaks to the downside may see a bigger move into 8960.

EUROPE

DAX (30) – 23972 (-237 or -0.98%)

The DAX moved lower this week, falling -0.98% and showing continued bearish pressure.

VOLATILITY ALERTS:

Tue 19:00 – Unemployment Change (Oct) – EUR

Wed 20:00 – Retail Sales MoM (Sep) – EUR

Wed 20:00 – Retail Sales YoY (Sep) – EUR

For a move to the upside, we must now see this market close above 24032. Should this occur, we will look for a move into 24092, and if the upside momentum is strong, we could see a move higher into 24152 and potentially 24272.

If we cannot close above 23912, we could see a move back to test 23852 before a pause to the downside. A break below this level may result in a sharp move lower into 23792, and any further breaks to the downside may see a bigger move into 23672.

US

S&P 500 – 6839 (+1 or +0.01%)

The SPX was flat this week, gaining just +0.01% and showing neutral price action.

VOLATILITY ALERTS:

Thu 02:00 – ISM Services PMI (Oct) – USD

Tue 02:00 – ISM Manufacturing PMI (Oct) – USD

Sat 00:30 – Non-Farm Payrolls & Unemployment Rate (Oct) – USD

For a move to the upside, we must now see this market close above 6856. Should this occur, we will look for a move into 6873, and if the upside momentum is strong, we could see a move higher into 6890 and potentially 6924.

If we cannot close above 6822, we could see a move back to test 6805 before a pause to the downside. A break below this level may result in a sharp move lower into 6788, and any further breaks to the downside may see a bigger move into 6754.

FOREX

AUD/USD – 0.6540 (+7 or +0.11%)

AUDUSD edged slightly higher this week, rising +0.11% and maintaining a mild bullish tone.

VOLATILITY ALERTS:

Mon 09:00 – S&P Global Manufacturing PMI (Oct) – AUD

Tue 14:30 – RBA Interest Rate Decision – AUD

Thu 11:30 – Balance of Trade (Sep) – AUD

Thu 02:00 – ISM Services PMI (Oct) – USD

Tue 02:00 – ISM Manufacturing PMI (Oct) – USD

Sat 00:30 – Non-Farm Payrolls & Unemployment Rate (Oct) – USD

For a move to the upside, we must now see this market close above 0.6556. Should this occur, we will look for a move into 0.6573, and if the upside momentum is strong, we could see a move higher into 0.6589 and potentially 0.6622.

If we cannot close above 0.6524, we could see a move back to test 0.6507 before a pause to the downside. A break below this level may result in a sharp move lower into 0.6491, and any further breaks to the downside may see a bigger move into 0.6458.

EUR/USD – 1.1533 (-97 or -0.83%)

EURUSD fell this week, losing -0.83% as bearish momentum strengthened.

VOLATILITY ALERTS:

Tue 19:00 – Unemployment Change (Oct) – EUR

Wed 20:00 – Retail Sales MoM (Sep) – EUR

Wed 20:00 – Retail Sales YoY (Sep) – EUR

Thu 02:00 – ISM Services PMI (Oct) – USD

Tue 02:00 – ISM Manufacturing PMI (Oct) – USD

Sat 00:30 – Non-Farm Payrolls & Unemployment Rate (Oct) – USD

For a move to the upside, we must now see this market close above 1.1562. Should this occur, we will look for a move into 1.1591, and if the upside momentum is strong, we could see a move higher into 1.1619 and potentially 1.1677.

If we cannot close above 1.1504, we could see a move back to test 1.1475 before a pause to the downside. A break below this level may result in a sharp move lower into 1.1447, and any further breaks to the downside may see a bigger move into 1.1389.

GBP/USD – 1.3140 (-180 or -1.35%)

GBPUSD weakened this week, dropping -1.35% as downside pressure increased.

VOLATILITY ALERTS:

Thu 23:00 – BoE Interest Rate Decision – GBP

Wed 20:30 – S&P Global Services PMI (Oct) – GBP

Thu 20:30 – DMP 1Y CPI Expectations (Oct) – GBP

Thu 02:00 – ISM Services PMI (Oct) – USD

Tue 02:00 – ISM Manufacturing PMI (Oct) – USD

Sat 00:30 – Non-Farm Payrolls & Unemployment Rate (Oct) – USD

For a move to the upside, we must now see this market close above 1.3173. Should this occur, we will look for a move into 1.3206, and if the upside momentum is strong, we could see a move higher into 1.3239 and potentially 1.3304.

If we cannot close above 1.3107, we could see a move back to test 1.3074 before a pause to the downside. A break below this level may result in a sharp move lower into 1.3041, and any further breaks to the downside may see a bigger move into 1.2976.

USD/JPY – 154.04 (+98 or +0.64%)

USDJPY pushed higher this week, gaining +0.64% with strong bullish momentum.

VOLATILITY ALERTS:

Thu 02:00 – ISM Services PMI (Oct) – USD

Tue 02:00 – ISM Manufacturing PMI (Oct) – USD

Sat 00:30 – Non-Farm Payrolls & Unemployment Rate (Oct) – USD

For a move to the upside, we must now see this market close above 154.43. Should this occur, we will look for a move into 154.81, and if the upside momentum is strong, we could see a move higher into 155.20 and potentially 155.97.

If we cannot close above 153.65, we could see a move back to test 153.27 before a pause to the downside. A break below this level may result in a sharp move lower into 152.88, and any further breaks to the downside may see a bigger move into 152.11.

COMMODITIES

GOLD – 4001 (-68 or -1.67%)

Gold slipped this week, losing -1.67% as sellers regained control.

For a move to the upside, we must now see this market close above 4011. Should this occur, we will look for a move into 4021, and if the upside momentum is strong, we could see a move higher into 4031 and potentially 4051.

If we cannot close above 3991, we could see a move back to test 3981 before a pause to the downside. A break below this level may result in a sharp move lower into 3971, and any further breaks to the downside may see a bigger move into 3951.

CRYPTOS

BITCOIN – 109768 (-4659 or -4.07%)

Bitcoin dropped sharply this week, falling -4.07% and showing strong bearish sentiment.

For a move to the upside, we must now see this market close above 110042. Should this occur, we will look for a move into 110317, and if the upside momentum is strong, we could see a move higher into 110591 and potentially 111140.

If we cannot close above 109494, we could see a move back to test 109219 before a pause to the downside. A break below this level may result in a sharp move lower into 108945, and any further breaks to the downside may see a bigger move into 108396.

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