Market Brief


Are rising oil prices and inflation expectations limiting upside potential in equity markets?

Could sustained energy volatility drive further weakness across global indices?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 –  8295 (-272 or -3.17%)

The ASX declined this week with a -3.17% move, showing bearish momentum and continued weakness compared to last week.

VOLATILITY ALERTS:
Wed 00:30 – CPI (AUD)

Wed 00:30 – RBA Trimmed Mean CPI YoY (AUD)

Wed 00:30 – RBA Weighted Median CPI YoY (AUD)

For a move to the upside, we must now see this market close above 8316. Should this occur, we will look for a move into 8336, and if the upside momentum is strong, we could see a move higher into 8357 and potentially 8399.

If we cannot close above 8274, we could see a move back to test 8254 before a pause to the downside. A break below this level may result in a sharp move lower into 8233, and any further breaks to the downside may see a bigger move into 8191.

EUROPE

DAX (30) –22041 (-1351 or -5.78%)

The DAX sold off sharply this week, posting a -5.78% loss and showing strong bearish momentum across the market.

VOLATILITY ALERTS:
Wed 09:00 – Ifo Business Climate (EUR)

Thu 07:00 – GfK Consumer Confidence (EUR)

Thu 08:00 – ECB Guindos Speech (EUR)

For a move to the upside, we must now see this market close above 22096. Should this occur, we will look for a move into 22151, and if the upside momentum is strong, we could see a move higher into 22206 and potentially 22317.

If we cannot close above 21986, we could see a move back to test 21931 before a pause to the downside. A break below this level may result in a sharp move lower into 21876, and any further breaks to the downside may see a bigger move into 21765.

US

S&P 500 –  6481 (-157 or -2.37%)

The SPX moved lower this week with a -2.37% decline, showing short-term bearish pressure and weakening momentum.

VOLATILITY ALERTS:
Tue 12:15 – ADP Employment Change (USD)

Thu 12:30 – Initial Jobless Claims (USD)

Fri 14:00 – Michigan Consumer Sentiment (USD)

For a move to the upside, we must now see this market close above 6497. Should this occur, we will look for a move into 6513, and if the upside momentum is strong, we could see a move higher into 6530 and potentially 6562.

If we cannot close above 6465, we could see a move back to test 6449 before a pause to the downside. A break below this level may result in a sharp move lower into 6432, and any further breaks to the downside may see a bigger move into 6400.

FOREX

AUD/USD –  0.6994 (-2 or -0.03%)

AUDUSD remained relatively flat this week with a slight -0.03% dip, showing neutral price action and lack of clear direction.

VOLATILITY ALERTS:
Wed 00:30 – CPI (AUD)

Wed 00:30 – RBA Trimmed Mean CPI YoY (AUD)

Wed 00:30 – RBA Weighted Median CPI YoY (AUD)

Tue 12:15 – ADP Employment Change (USD)

Thu 12:30 – Initial Jobless Claims (USD)

Fri 14:00 – Michigan Consumer Sentiment (USD)

For a move to the upside, we must now see this market close above 7011. Should this occur, we will look for a move into 7029, and if the upside momentum is strong, we could see a move higher into 7046 and potentially 7081.

If we cannot close above 6977, we could see a move back to test 6959 before a pause to the downside. A break below this level may result in a sharp move lower into 6942, and any further breaks to the downside may see a bigger move into 6907.

EUR/USD –1.1544 (+114 or +1%)

EURUSD pushed higher this week with a +1% gain, showing bullish momentum and strengthening price action.

VOLATILITY ALERTS:

Wed 09:00 – Ifo Business Climate (EUR)

Thu 07:00 – GfK Consumer Confidence (EUR)

Thu 08:00 – ECB Guindos Speech (EUR)

Tue 12:15 – ADP Employment Change (USD)

Thu 12:30 – Initial Jobless Claims (USD)

Fri 14:00 – Michigan Consumer Sentiment (USD)

For a move to the upside, we must now see this market close above 11573. Should this occur, we will look for a move into 11602, and if the upside momentum is strong, we could see a move higher into 11631 and potentially 11688.

If we cannot close above 11515, we could see a move back to test 11486 before a pause to the downside. A break below this level may result in a sharp move lower into 11457, and any further breaks to the downside may see a bigger move into 11400.

GBP/USD – 1.3314 (+72 or +0.54%)

GBPUSD climbed this week with a +0.54% gain, showing moderate bullish momentum and continued upward price movement.

VOLATILITY ALERTS:

Wed 07:00 – Inflation Rate YoY (GBP)

Tue 11:00 – CBI Distributive Trades (GBP)

Fri 07:00 – Retail Sales MoM (GBP)

Tue 12:15 – ADP Employment Change (USD)

Thu 12:30 – Initial Jobless Claims (USD)

Fri 14:00 – Michigan Consumer Sentiment (USD)

For a move to the upside, we must now see this market close above 13347. Should this occur, we will look for a move into 13381, and if the upside momentum is strong, we could see a move higher into 13414 and potentially 13480.

If we cannot close above 13281, we could see a move back to test 13247 before a pause to the downside. A break below this level may result in a sharp move lower into 13214, and any further breaks to the downside may see a bigger move into 13148.


USD/JPY – 159.35 (-21 or -0.13%)

USDJPY edged lower this week with a -0.13% move, showing slight bearish pressure and weakening short-term momentum.

VOLATILITY ALERTS:

Mon 23:30 – Inflation Rate YoY (JPY)

Mon 23:30 – Core Inflation Rate YoY (JPY)

Tue 23:50 – BoJ Monetary Policy Meeting Minutes (JPY)

Tue 12:15 – ADP Employment Change (USD)

Thu 12:30 – Initial Jobless Claims (USD)

Fri 14:00 – Michigan Consumer Sentiment (USD)

For a move to the upside, we must now see this market close above 15975. Should this occur, we will look for a move into 16015, and if the upside momentum is strong, we could see a move higher into 16055 and potentially 16134.

If we cannot close above 15895, we could see a move back to test 15855 before a pause to the downside. A break below this level may result in a sharp move lower into 15815, and any further breaks to the downside may see a bigger move into 15736.

COMMODITIES

GOLD – 4337 (-646 or -12.96%)

Gold dropped sharply this week with a -12.96% decline, showing strong bearish momentum and heavy selling pressure.

For a move to the upside, we must now see this market close above 4348. Should this occur, we will look for a move into 4359, and if the upside momentum is strong, we could see a move higher into 4370 and potentially 4391.

If we cannot close above 4326, we could see a move back to test 4315 before a pause to the downside. A break below this level may result in a sharp move lower into 4304, and any further breaks to the downside may see a bigger move into 4283.

CRYPTOS

BITCOIN – 67580 (-5044 or -6.95%)

Bitcoin moved lower this week with a -6.95% drop, showing bearish momentum and continued downside pressure.

For a move to the upside, we must now see this market close above 67749. Should this occur, we will look for a move into 67918, and if the upside momentum is strong, we could see a move higher into 68087 and potentially 68425.

If we cannot close above 67411, we could see a move back to test 67242 before a pause to the downside. A break below this level may result in a sharp move lower into 67073, and any further breaks to the downside may see a bigger move into 66735.

DISCLAIMER

The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, hold or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View accepts no responsibility for any use that may be made of these comments for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.