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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7226 (-44 or -0.61%)
The ASX edged lower with a pattern of lower highs developing, suggesting a continued trend lower.
VOLATILITY ALERTS:
Weds 09:00 – RBA Gov Lowe speaks
Weds 11:30 – CPI y/y/
For a move higher, we would like to see the ASX close 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 close 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) – 15985 (-304 or -1.87%)
The DAX closed lower, though it could have been worse if not for a strong finish to the week.
VOLATILITY ALERTS:
Tues 17:30 – German Flash Manufacturing and Services PMI
For the DAX to move higher, we would like to see it close above 16090. Should this occur, then 16270 is the next level ahead. If upside momentum is strong, then 16470 and 16800 cannot be ruled out.
To the downside, should we not see it hold above 16090, we will look for a move into support at 15970. A strong break and close below this handle and 15820 is the next level down. If downside pressure mounts, then 15650 cannot be ruled out.
US
S&P 500 – 4210 (+25 or +0.6%)
Big tech continues to lead the way in the US as the SPX managed to edge slightly higher.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Thurs 00:00 – Jolts Jobs Openings
Fri 00:00 – ISM Manufacturing PMI
Fri 22:30 – Average Hourly Earnings m/m and Non-Farm Payrolls
For a move higher, we would like to see the S&P hold above 4150. Should this occur, we will look for a move through 4215. And if momentum is strong, we cannot rule out moves to 4320 and 4425.
If we cannot hold above 4150, we could see this market move down into 4095. A break of this level, however, may result in a quick move down to 3965. And if momentum to the downside remains strong, we may see a fast move back down to 3915.
FOREX
AUD/USD – 0.6516 (-133 or -2%)
Not a good week for the Aussie Dollar as it closes firmly below its previous yearly lows.
VOLATILITY ALERTS:
Weds 09:00 – RBA Gov Lowe speaks
Weds 11:30 – CPI y/y
For a move higher this week, we would like to see it close above 0.6525. We will then be targeting a move through 0.6585. If we see a strong break and close above this level, then we can’t rule out a move to 0.6670. Should momentum to the upside be really strong, then 0.6715 could be targeted.
If this market cannot close above 0.6525, we could see a move down to 0.6385. A strong break of this level may result in a move into 0.6270, however, any weakness below this level could see a sharp drop into 0.6200.
EUR/USD – 1.0725 (-80 or -0.74%)
The Euro is under pressure from the resurgent USD with sellers of this pair very much in control.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Thurs 00:00 – Jolts Jobs Openings
Fri 22:30 – US Average Hourly Earnings m/m and Non-Farm Payrolls
For a move higher, we would like to see the Euro close above 1.0760. Should this occur, we should see a move above 1.0940. A break of this level could see this market rally further to 1.1115 and 1.1215.
If the EURO cannot close above 1.0760, we will see a move into 1.0600. A strong break of this level may result in a move into 1.0470, however, any weakness below this level could see a move into 1.0290.
GBP/USD – 1.2345 (-101 or -0.81%)
All majors were down against the USD this week with the GBP down for the second consecutive week.
VOLATILITY ALERTS:
Tues 18:30 – UK Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable close 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 close above 1.2405, 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 – 140.60 (+263 or +1.91%)
Dollar Yen has taken off and looks set to keep running higher.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Thurs 00:00 – Jolts Jobs Openings
Fri 00:00 – ISM Manufacturing PMI
Fri 22:30 – Average Hourly Earnings m/m and Non-Farm Payrolls
For a move to the upside, we must now see this market hold above 140.30. Should this occur, we will look for a move into 142.25, and if the upside momentum is strong, we could see a move higher into 143.45 and potentially 144.95.
If we cannot hold above 140.30, we could see a move back to test 139.10 before a pause to the downside. A break below this level may result in a sharp move lower into 137.55, and any further breaks to the downside may see a bigger move into 134.50.
COMMODITIES
GOLD – 1946 (-31 or -1.57%)
Lower highs and lower lows continue to stack up on Gold with a trend lower set to continue.
VOLATILITY ALERTS:
Fri 22:30 – Average Hourly Earnings m/m and Non-Farm Payrolls
For a move higher, we need to see this market close above 1960. Should this occur we could see a move into 2000; and any break of this level could see a stronger move into 2015. If momentum is strong, then 2030 cannot be ruled out.
If Gold cannot close above 1960, we can see a move down to 1910. A break below this level could see a move lower into 1870; and if momentum is very strong to the downside, we could see a move to 1850.
CRYPTOS
BITCOIN – 26755 (-199 or -0.74%)
Another quiet week for BTC as price action contracts.
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 the 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.
