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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7372 (+143 or +1.98%)
Positive week for the ASX, successfully holding above key support and must now capitalise by taking another leg higher.
VOLATILITY ALERTS:
Mon 09:30 – Monetary Policy Meeting Minutes
For a move higher we would like to see the ASX hold 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 hold 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 – 15804 (+176 or +1.13%)
The DAX moved higher to close at new yearly highs – a run at new ATH on the cards?v
VOLATILITY ALERTS:
Fri 03:30 – Germany Flash Manufacturing & Services PMI
For the DAX to move higher we would like to see it hold above 15650. Should this occur then 15820 is the next level ahead. If upside momentum is strong then 15970 and 16270 cannot be ruled out.
To the downside, should we not see it hold above 15650, we will look for a move into support at 15515. A strong break and close below this handle and 15325 is the next level down. If downside pressure mounts then 15025 cannot be ruled out.
US
S&P 500 – 4146 (+35 or +0.85%)
Earnings season has kicked off in the US… the catalyst for a break of its current yearly highs or is there more work to do?
VOLATILITY ALERTS:
Thurs 08:30 – Unemployment Claims
Fri 09:45 – US Flash Manufacturing & Services PMI
For a move higher we would like to see the S&P hold above 4095. Should this occur, we will look for a move through 4150; and if momentum is strong we cannot rule out moves to 4215 and 4320.
If we cannot hold above 4095, we could see this market move down into 3965. A break of this level however may result in a quick move down to 3915; and if momentum to the downside remains strong we may see a fast move back down to 3810.
FOREX
AUD/USD – 0.6709 (+46 or +0.69%)
An attempted upside break quickly faded as the Aussie Dollar remained range bound.
VOLATILITY ALERTS:
Mon 09:30 – Monetary Policy Meeting Minutes
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 0.6825. Should momentum to the upside be really strong then 0.6870 could be targeted.
If this market cannot hold above 0.6670, we could see a move down into 0.6585. A strong break of this level may result in a move into 0.6525, however any weakness below this level could see a sharp drop into 0.6385.
EUR/USD – 1.0994 (+96 or +0.88%)
With further signs of cooling inflation in the US, Fed rate hike bets edged lower resulting in flow out of the USD.
VOLATILITY ALERTS:
Fri 03:15 – French Flash Manufacturing & Services PMI
Fri 03:30 – Germany Flash Manufacturing & Services PMI
For a move higher we would like to see the Euro hold above 1.0940. Should this occur we should see a move above 1.1115. A break of this level could see this market rally further to 1.1215 and 1.1385.
If the EURO cannot hold above 1.0940 we will see a move into 1.0760. A strong break of this level may result in a move into 1.0600, however, any weakness below this level could see a move into 1.0470.
GBP/USD – 1.2413 (-3 or -0.02%)
The Cable closed almost flat so our levels remain unchanged.
VOLATILITY ALERTS:
Tues 02:00 – Claimant Count Change
Weds 02:00 – CPI Y/y
Fri 04:30 – Flash Manufacturing & Services PMI
For a move to the upside, we would like to see Cable hold 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 push back 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 hold above 1.2400, 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 – 133.73 (+159 or +1.2%)
The Dollar Yen edged slightly higher but intra-week price action remains choppy.
VOLATILITY ALERTS:
Thurs 08:30 – Unemployment Claims
Fri 09:45 – US Flash Manufacturing & Services PMI
For a move to the upside we must now see this market hold above 132.50. Should this occur we will look for a move into 134.50, and if upside momentum is strong we could see a move higher into 137.55 and potentially 139.10.
If we cannot hold above 132.50, we could see a move back to test 131.40 before a pause to the downside. A break below this level may result in a sharp move lower into 129.50; and any further breaks to the downside may see a bigger move into 127.20.
COMMODITIES
GOLD – 2004 (+5 or +0.25%)
Gold made new yearly highs but that sharp move lower on Friday left it only marginally higher on the week.
For a move higher we need to see this market hold above 2000. Should this occur we could see a move into 2014; and any break of this level could see a stronger move into 2050. If momentum is strong then 2075 cannot be ruled out.
If Gold cannot hold above 2000, we can see a move down to 1960. A break below this level could see a move lower into 1910; and if momentum is very strong to the downside we could see a move to 1870.
CRYPTOS
BITCOIN – 30263 (+2323 or +8.31%)
A break higher for BTC as the crypto space starts to get excited over Ethereum’s Shanghai upgrade.
For a move higher we must now see this market hold above 28000. Should this occur we could see a move into 31050 before retesting 32590. If upside momentum is really strong then we can’t rule out 36850.
Failure to hold 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.
