Blog

Market Brief


Will the FED Spring a Surprise with Interest Rates?

The S&P 500 has risen by 17.3% this year due to hopes of improving inflation trends. However, in recent weeks, some concerning signs have emerged, suggesting that the Federal Reserve's efforts to control inflation might be negatively affecting the economy.

Are there any hints or signals suggesting the FED could take an unconventional approach this time?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7236 (+86 or +1.2%)

The ASX has remained inside its current trading ranging.

VOLATILITY ALERTS:

Tue 10:30 – AUD RBA Meeting Minutes

For a move higher, we would like to see the ASX close above 7236. Should this occur, a move above 7269 should be expected, and if momentum is strong, we cannot rule out moves to 7389 and 7425.
Failure to close above 7236 means a potential move into 7196. 7112 is the next support level down if 7093 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6991.

EUROPE

DAX (30) – 15900 (+147 or +0.93%)

The DAX has continued to move sideways, what will the next catalyst be to break out of this range?

VOLATILITY ALERTS:

Tues 19:00 – EUR CPI

For the DAX to move higher, we would like to see it close above 15900. Should this occur, then 16029 is the next level ahead. If upside momentum is strong, then 16306 and 16427 cannot be ruled out. 

To the downside, should we not see it hold above 15900, we will look for a move into support at 15791. A strong break and close below this handle and 15600 is the next level down. If downside pressure mounts, then 15396 cannot be ruled out.

S&P 500 – 4461 (-7 or -0.16%)

The SPX is mostly unchanged this week.

VOLATILITY ALERTS:

Tues 22:30 – USD Building Permits

Thur 04:00 – USD Fed Interest Rate Decision

Thur 04:30 – USD Fed Press Conference

Fri 00:00 – USD Existing Home Sales

For a move higher, we would like to see the S&P hold above 4462. Should this occur, we will look for a move through 4480. And if momentum is strong, we cannot rule out moves to 4518 and 4614.

If we cannot hold above 4462, we could see this market move down into 4412 A break of this level, however, may result in a quick move down to 4339. And if momentum to the downside remains strong, we may see a fast move back down to 4245.

FOREX

AUD/USD – 0.6442 (+48 or +0.75%)

The AUDUSD has been in a multi week down trend, and has found support around the 0.640 level. Will this hold with the upcoming USD news?

VOLATILITY ALERTS:

Tue 10:30 – AUD RBA Meeting Minutes

Tues 22:30 – USD Building Permits

Thur 04:00 – USD Fed Interest Rate Decision

Thur 04:30 – USD Fed Press Conference

Fri 00:00 – USD Existing Home Sales

For a move higher this week, we would like to see it hold above 0.6442. We will then be targeting a move through 0.6457. If we see a strong break and close above this level, then we can’t rule out a move to 0.6500. Should momentum to the upside be really strong, then 0.6550 could be targeted.

If this market cannot hold above 0.6442 we could see a move down to 0.6377. A strong break of this level may result in a move into 0.6327, however, any weakness below this level could see a sharp drop into 0.6274.

EUR/USD – 1.0664 (-47 or -0.44%)

The EURUSD has continued to move lower keeping to its downtrend.

VOLATILITY ALERTS:

Tues 19:00 – EUR CPI

Tues 22:30 – USD Building Permits

Thur 04:00 – USD Fed Interest Rate Decision

Thur 04:30 – USD Fed Press Conference

Fri 00:00 – USD Existing Home Sales

For a move higher, we would like to see the Euro close above 1.0664. Should this occur, we should see a move above 1.0750. A break of this level could see this market rally further to 1.0800 and 1.0940.

If the EURO cannot close above 1.0664, we will see a move into 1.063. A strong break of this level may result in a move into 1.057, however, any weakness below this level could see a move into 1.051.

GBP/USD – 1.2390 (-94 or -0.75%)

GBPUSD has continued to move lower this week.

VOLATILITY ALERTS:

Wed 16:00 – GBP Inflation Rate

Thur 21:00 – GBP BoE Interest Rate Decision

Fri 16:00 – GBP Retail Sales

Tues 22:30 – USD Building Permits

Thur 04:00 – USD Fed Interest Rate Decision

Thur 04:30 – USD Fed Press Conference

Fri 00:00 – USD Existing Home Sales

For a move to the upside, we would like to see Cable hold above 1.2390 before a break higher into 1.2433. If this market can see a strong close above this level, we may then see a strong pushback into 1.2540. If upside momentum is really strong, then a move back into 1.2659 can’t be ruled out.

Should we fail to hold above 1.2390, we will look for a move down to 1.2346. A break below this level, however, could see Cable further depreciate to 1.2243 by the week’s end. And if momentum is very weak, we cannot rule out a move to 1.2176.

USD/JPY – 147.71 (+82 or +0.56%)

The USDJPY closed slightly higher this week.

VOLATILITY ALERTS:

Wed 9:50 – JPY Balance of Trade

Fri 09:30 – JPY Inflation Rate

Fri 13:00 – JPY BoJ Interest Rate Decision

Tues 22:30 – USD Building Permits

Thur 04:00 – USD Fed Interest Rate Decision

Thur 04:30 – USD Fed Press Conference

Fri 00:00 – USD Existing Home Sales

For a move to the upside, we must now see this market close above 147.71. Should this occur, we will look for a move into 148.06, and if the upside momentum is strong, we could see a move higher into 148.92 and potentially 150.13.

If we cannot close above 147.71, we could see a move back to test 146.09 before a pause to the downside. A break below this level may result in a sharp move lower into 144.79, and any further breaks to the downside may see a bigger move into 142.98.

COMMODITIES

GOLD – 1928 (+9 or +0.47%)

GOLD is up 0.47% this past week.

For a move higher, we need to see this market close above 1919. Should this occur we could see a move into 1926; and any break of this level could see a stronger move into 1944. If momentum is strong, then 1981 cannot be ruled out.

If Gold cannot close above 1919, 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 1856.

CRYPTOS

BITCOIN – 26642 (+945 or +3.68%)

Bitcoin is up 3% this past week, will the momentum continue?

For a move higher, we must now see this market close above 26000. Should this occur, we could see a move into 27000 before retesting 28000. If the upside momentum is really strong, then we can’t rule out 30000.

Failure to close above 26000 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.

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.