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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7123 (-56 or -0.78%)
The ASX closed lower for the second week running as global markets took a risk-off view of the global central bank rhetoric.
For a move higher we would like to see the ASX close 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 7350.
Failure to close 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 6805.
EUROPE
DAX – 13906 (-420 or -2.93%)
A firm rejection off resistance for the DAX and further downside could be anticipated – a move back into the long-term descending trend line?
For the DAX to move higher we would like to see it close above 13765. Should this occur then 14265 is the next level ahead. If upside momentum is strong then 14710 and 14915 cannot be ruled out.
To the downside, should we not see it close above 13765, we will look for a move into support at 13565. A strong break and close below this handle and 13375 is the next level down. If downside pressure mounts then 13250 cannot be ruled out.
US
S&P 500 – 3843 (-86 or -2.19%)
Chances of a Santa Claus rally appear to be fading as markets digest the ultra-hawkish tone from central banks.
VOLATILITY ALERTS:
Thurs 02:00 – CB Consumer Confidence
Fri 00:30 – GDP m/m and Core PCE price index m/m
For a move higher we would like to see the S&P close above 3915. Should this occur, we will look for a move to 3965; and if momentum is strong we cannot rule out moves to 4095 and 4145.
If we cannot close above 3915, we could see this market move down into 3840. A break of this level, however, may result in a quick move down to 3740, and if momentum to the downside remains strong we may see a fast move back down to 3635.
FOREX
AUD/USD – 0.6687 (-109 or -1.6%)
Risk-off sentiment weighed on the Aussie Dollar later in the week and is the main theme to watch for the week ahead.
For a move higher this week, we would like to see it close above 0.6715. We will then be targeting a move through 0.6830. If we see a strong break and close above this level then we can’t rule out a move to 0.6915. Should momentum to the upside be really strong then 0.6960 could be targeted.
If this market cannot close above 0.6715, we could see a move down into 0.6670. A strong break of this level may result in a move into 0.6580, however, any weakness below this level could see a sharp drop into 0.6485.
EUR/USD – 1.0585 (+51 or +0.48%)
The Euro’s upside trend continues but be aware of the Greenback bulls who haven’t quite gone away yet.
For a move higher we would like to see the Euro hold above 1.0470. Should this occur we could see a move into 1.0600. A break of this level could see this market rally further to 1.0760 and 1.0940.
If the EURO cannot hold above 1.0470 we will see a move into 1.0355. A strong break of this level may result in a move into 1.0215, however, any weakness below this level could see a move into parity at 1.0070.
GBP/USD – 1.2143 (-120 or -0.98%)
The Cable was not able to get a weekly close above the August highs despite the midweek break, a turning point in the trend?
For a move to the upside, we would like to see Cable close above 1.2145 before a break higher into 1.2275. If this market can see a strong close above this level we may then see a strong push back into 1.2400 If upside momentum is really strong then a move back into 1.2600 can’t be ruled out.
Should we fail to close above 1.2145, we will look for a move down to 1.1930. A break below this level however could see Cable further depreciate to 1.1740 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1610.
USD/JPY – 136.73 (+15 or +0.11%)
A flat week overall for the Dollar Yen and our levels remain the same.
VOLATILITY ALERTS:
Tues – BoJ Interest Rate Decision and Monetary Policy Statement
Thurs 02:00 – CB Consumer Confidence
Fri 00:30 – US GDP m/m and Core PCE price index m/m
For a move to the upside, we must now see this market hold above 135.60. Should this occur we will look for a move into 137.70, and if upside momentum is strong we could see a move higher into 139.25 and potentially 140.
If we cannot hold above 135.60, we could see a move back to test 134.50 before a pause to the downside. A break below this level may result in a sharp move lower into 132.50, and any further breaks to the downside may see a bigger move into 131.40.
Weds 00:30 – US CPI / Core CPI M/m and Y/y
Thurs 06:00 – FOMC Interest Rate Decision and Statement
Thurs 06:30 – FOMC Press Conference
For a move to the upside, we must now see this market hold above 135.60. Should this occur we will look for a move into 137.70, and if upside momentum is strong we could see a move higher into 139.25 and potentially 140.
If we cannot hold above 135.60, we could see a move back to test 134.50 before a pause to the downside. A break below this level may result in a sharp move lower into 132.50, and any further breaks to the downside may see a bigger move into 131.40.
COMMODITIES
GOLD – 1792 (-5 or -0.28%)
Another choppy, sideways week for Gold and our levels remain the same.
VOLATILITY ALERTS:
Thurs 02:00 – CB Consumer Confidence
Fri 00:30 – US GDP m/m and Core PCE price index m/m
For a move higher we need to see this market hold above 1785. Should this occur we could see a move into 1805, and any break of this level could see a stronger move into 1830. If momentum is strong then 1850 cannot be ruled out.
If Gold cannot hold above 1785, we need to see it hold at 1765. A break below this level could see a move lower into 1735, and if momentum is very strong to the downside we could see a move to 1720.
CRYPTOS
BITCOIN – 17147 (+53 or +0.31%)
BTC edged slightly higher but without enough momentum to break the range highs.
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.
