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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7177 (-29 or -0.4%)
The ASX edged slightly lower but all in all it was a quiet week.
VOLATILITY ALERTS:
Tues 18:00 – RBA Gov Lowe speaks
For a move higher we would like to see the ASX hold above 7140. Should this occur, a move into 7240 could be expected; and if momentum is strong we cannot rule out moves to 7300 and 7440.
Failure to hold above 7140 means a potential move into 7020. 6875 is the next support level down if 7020 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6745.
EUROPE
DAX – 14443 (+130 or +0.91%)
The DAX continues to climb and now has the early June high in its sights.
VOLATILITY ALERTS:
Weds 19:15 – French and German Flash Services and Manufacturing PMI
For the DAX to move higher we would like to see it hold above 14265. Should this occur then 14710 is the next level ahead. If upside momentum is strong then 14915 and 15050 cannot be ruled out.
To the downside, should we not see it hold above 14265, we will look for a move into support at 13970. A strong break and close below this handle and 13565 is the next level down. If downside pressure mounts then 13375 cannot be ruled out.
US
S&P 500 – 3965 (-26 or -0.65%)
A quiet week for the SPX as it closed slightly lower, though our levels remain unchanged.
VOLATILITY ALERTS:
Thurs 00:30 – Core Durable Goods Orders m/m
Thurs 06:00 – FOMC Minutes
For a move higher we would like to see the S&P hold above 3965. Should this occur, we will look for a move to 4095; and if momentum is strong we cannot rule out moves to 4145 and 4215.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level however may result in a quick move down to 3840; and if momentum to the downside remains strong we may see a fast move back down to 3740.
FOREX
AUD/USD – 0.6670 (-36 or -0.54%)
The Aussie Dollar edges slightly lower and appears to be tracking equities closely at present.
VOLATILITY ALERTS:
Tues 18:00 – RBA Gov Lowe speaks
For a move higher this week, we would like to see it hold above 0.6670. We will then be targeting a move through 0.6715. If we see a strong break and close above this level then we can’t rule out a move to 0.6830. Should momentum to the upside be really strong then 0.6960 could be targeted.
If this market cannot hold above 0.6670, we could see a move down into 0.6580. A strong break of this level may result in a move into 0.6485, however, any weakness below this level could see a sharp drop into 0.6415.
EUR/USD – 1.0322 (-30 or -0.29%)
This a reminder that there are still USD bulls around as the Euro edged lower.
VOLATILITY ALERTS:
Weds 19:15 – French and German Flash Services and Manufacturing PMI
For a move higher we would like to see the Euro close above 1.0355. Should this occur we could see a move into 1.0470. A break of this level could see this market rally further to 1.0600 and 1.0760.
If the EURO cannot close above 1.0355, we will see a move into 1.0215. A strong break of this level may result in a move into 1.0070, however, any weakness below this level could see a move into parity at 1.000.
GBP/USD – 1.1882 (+50 or +0.42%)
The only of the three to post a weekly gain against the USD as UK markets appreciated a more realistic and stable Government budget.
VOLATILITY ALERTS:
Weds 20:30 – UK Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable hold above 1.1740 before a break higher into 1.1930. If this market can see a strong close above this level we may then see a strong push back into 1.2145 If upside momentum is really strong then a move back into 1.2280 can’t be ruled out.
Should we fail to hold above 1.1740, we will look for a move down to 1.1610. A break below this level however could see Cable further depreciate to 1.1490 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1410.
USD/JPY – 140.36 (+160 or +1.15%)
The Dollar Yen held firm to post its first weekly gain in 5 attempts.
VOLATILITY ALERTS:
Thurs 00:30 – Core Durable Goods Orders m/m
Thurs 06:00 – FOMC Minutes
For a move to the upside we must now see this market hold above 140. Should this occur we will look for a move into 142, and if upside momentum is strong we could see a move higher into 143.25 and potentially 145.
If we cannot hold above 140, we could see a move back to test 139.25 before a pause to the downside. A break below this level may result in a sharp move lower into 137.70; and any further breaks to the downside may see a bigger move into 135.60.
COMMODITIES
GOLD – 1750 (-20 or -1.13%)
Gold rejected off one of our key overhead levels – a turning point in the recent trend?
For a move higher we need to see this market close above 1765. Should this occur we could see a move into 1785; and any break of this level could see a stronger move into 1805. If momentum is strong then 1830 cannot be ruled out.
If Gold cannot close above 1765, we need to see it hold at 1735. A break below this level could see a move lower into 1720; and if momentum is very strong to the downside we could see a move to 1695.
CRYPTOS
BITCOIN – 16511 (-321 or -1.91%)
A very quiet week for Crypto and BTC as the fallout from the FTX collapse continues…
For a move higher we must now see this market close above 17510. Should this occur we could see a move into 18700 before retesting 20000. If upside momentum is really strong then we can’t rule out 21715.
Failure to close above 17510 could see a move into 15515. If selling pressure takes control then we could see a move down to 14000. A close below this level and 12325 can’t be ruled out, maybe even a 10650 print.
