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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6984 (+109 or +1.59%)
ASX continues to move higher after a strong close out of the descending trend line.
VOLATILITY ALERTS:
Tues 20:30 – RBA Gov Lowe speaks
For a move higher we would like to see the ASX hold above 6875. Should this occur, a move into 7020 could be expected; and if momentum is strong we cannot rule out moves to 7140 and 7240.
Failure to hold above 6875 means a potential move into 6745. 6650 is the next support level down if 6745 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6535.
EUROPE
DAX – 13494 (+155 or +1.16%)
The DAX has also broken through its long-term descending trend line and now must get through the recent lower high.
For the DAX to move higher we would like to see it hold above 13375. Should this occur then 13565 is the next level ahead. If upside momentum is strong then 13972 and 14265 cannot be ruled out.
To the downside, should we not see it hold above 13375, we will look for a move into support at 13250. A strong break and close below this handle and 12965 is the next level down. If downside pressure mounts then 12635 cannot be ruled out.
US
S&P 500 – 3763 (-149 or -3.81%)
The SPX moved lower as the Fed continued to deliver a hawkish message for markets.
VOLATILITY ALERTS:
Fri 00:30 – CPI and Core CPI m/m and y/y
For a move higher we would like to see the S&P hold above 3740. Should this occur, we will look for a move to 3840; and if momentum is strong we cannot rule out moves to 3915 and 3965.
If we cannot hold above 3740, we could see this market move down into 3665. A break of this level however may result in a quick move down to 3635, and if momentum to the downside remains strong we may see a fast move back down to 3550.
FOREX
UD/USD – 0.6465 (+54 or +0.84%)
A strong Friday saved the Aussie Dollar which had been ticking lower all week, but it isn’t out of the woods yet…
VOLATILITY ALERTS:
Tues 20:30 – RBA Gov Lowe speaks
For a move higher this week, we would like to see it hold above 0.6415. We will then be targeting a move through 0.6485. If we see a strong break and close above this level then we can’t rule out a move to 0.6580. Should momentum to the upside be really strong then 0.6670 could be targeted.
If this market cannot hold above 0.6415, we could see a move down into 0.6305. A strong break of this level may result in a move into 0.6205, however, any weakness below this level could see a sharp drop into 0.6075.
EUR/USD – 0.9958 (-7 or -0.07%)
The Euro closed the week flat and our levels remain unchanged.
VOLATILITY ALERTS:
Fri 00:30 – US CPI and Core CPI m/m and y/y
For a move higher we would like to see the Euro hold above 0.9950. Should this occur we could see a move into 1.0000. A break of this level could see this market rally further to 1.0090 and 1.0200.
If the EURO cannot hold above 0.9950, we will see a move into 0.9875. A strong break of this level may result in a move into 0.9810, however, any weakness below this level could see a move into 0.9700.
GBP/USD – 1.1372 (-238 or -2.05%)
A dovish BOE (despite a multi-decade breaking rate hike) saw the GBP sell-off – will Friday’s bounce be enough to sustain the recent trend higher?
VOLATILITY ALERTS:
Fri 18:00 – GDP m/m
For a move to the upside, we would like to see Cable hold above 1.1330 before a break higher into 1.1250. If this market can see a strong close above this level we may then see a strong pushback into 1.1145 If upside momentum is really strong then a move back into 1.1060 can’t be ruled out.
Should we fail to hold above 1.1330, we will look for a move down to 1.1250. A break below this level however could see Cable further depreciate to 1.1145 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1060.
USD/JPY – 146.61 (-86 or -0.58%)
The Dollar Yen edged slightly lower for the week as indecision remains in the air.
VOLATILITY ALERTS:
Fri 00:30 – US CPI and Core CPI m/m and y/y
For a move to the upside we must now see this market hold above 145. Should this occur we will look for a move into 147.75, and if upside momentum is strong we could see a move higher into 150 and potentially 151.80.
If we cannot hold above 145, we could see a move back to test 143.25 before a pause to the downside. A break below this level may result in a sharp move lower into 142; and any further breaks to the downside may see a bigger move into 140.
COMMODITIES
GOLD – 1680 (+36 or +2.19%)
USD weakness and Gold bulls came to the rescue as new yearly lows were threatened – Friday’s move has given a bit of breathing space, for now.
VOLATILITY ALERTS:
Fri 00:30 – US CPI and Core CPI m/m and y/y
For a move higher we need to see this market close strongly above 1680. Should this occur we could see a move into 1697, and any break of this level could see a stronger move into 1710. If momentum is strong then 1720 cannot be ruled out.
If Gold cannot close above 1680, we need to see it hold at 1652. A break below this level could see a move lower into 1645, and if momentum is very strong to the downside we could see a move to 1615.
CRYPTOS
BITCOIN – 21189 (+444 or +2.14%)
More promising signs for BTC bulls as we closed higher for the week despite equities moving lower.
For a move higher we must now see this market hold above 20000. Should this occur we could see a move into 21715 before retesting 23675. If upside momentum is really strong then we can’t rule out 25875.
Failure to hold above 20000 could see a move into 18700. If selling pressure takes control then we could see a move down to 17560. A close below this level and 14000 can’t be ruled out, maybe even a 12325 print.
