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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 (+134 or +1.9%)
A ripping Friday saw the ASX enjoy its first weekly gain in five attempts.
VOLATILITY ALERTS:
Weds 11:30 – CPI Y/y
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 7350.
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 6805.
EUROPE
DAX – 14664 (+758 or +5.45%)
The DAX started the year strong but now needs to push through this area of resistance.
For the DAX to move higher we would like to see it close above 14710. Should this occur then 14915 is the next level ahead. If upside momentum is strong then 15050 and 15325 cannot be ruled out.
To the downside, should we not see it close above 14710, we will look for a move into support at 14265. A strong break and close below this handle and 13970 is the next level down. If downside pressure mounts then 13565 cannot be ruled out.
US
S&P 500 – 3843 (+47 or +1.22%)
The SPX continues to track sideways and must now find a breakout of this consolidated area.
VOLATILITY ALERTS:
Weds 01:00 – Fed Chair Powell speaks
Fri 00:30 – CPI and Core CPI Y/y
Sat 02:00 – Prelim UoM Consumer Sentiment
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 – 0.6865 (+178 or +2.66%)
The Aussie Dollar has been bouncing around but without any joy of breaking upside resistance.
VOLATILITY ALERTS:
Weds 11:30 – CPI Y/y
For a move higher this week we would like to see it close above 0.6915. We will then be targeting a move through 0.6960. If we see a strong break and close above this level then we can’t rule out a move to 0.7000. Should momentum to the upside be really strong then 0.7050 could be targeted.
If this market cannot close above 0.6915, we could see a move down into 0.6830. A strong break of this level may result in a move into 0.6715, however any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 1.0643 (-57 or -0.53%)
The Euro’s upside momentum had been slowing down but key support was found last week which suggests the trend may not be over yet.
For a move higher we would like to see the Euro hold above 1.0600. Should this occur we could see a move into 1.0760. A break of this level could see this market rally further to 1.0940 and 1.1115.
If the EURO cannot hold above 1.0600 we will see a move into 1.0470. A strong break of this level may result in a move into 1.0355, however any weakness below this level could see a move into parity at 1.0215.
GBP/USD – 1.2092 (+12 or +0.1%)
A quiet Christmas period for the Cable and our levels remain the same.
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 – 132.10 (+102 or +0.78%)
The Dollar Yen keeps meeting sellers at the downtrend line, how long will this play continue for?
VOLATILITY ALERTS:
Weds 01:00 – Fed Chair Powell speaks
Fri 00:30 – CPI and Core CPI Y/y
Sat 02:00 – Prelim UoM Consumer Sentiment
For a move to the upside we must now see this market close 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 135.6 and potentially 137.7.
If we cannot close 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 126.90.
COMMODITIES
GOLD – 1865 (+42 or +2.3%)
Gold’s upwards trajectory continues with a strong start to the year in the bag.
For a move higher we need to see this market hold above 1850. Should this occur we could see a move into 1872; and any break of this level could see a stronger move into 1830. If momentum is strong then 1895 cannot be ruled out.
If Gold cannot hold above 1850, we need to see it hold at 1830. A break below this level could see a move lower into 1805; and if momentum is very strong to the downside we could see a move to 1785.
CRYPTOS
BITCOIN – 16949 (+351 or +2.11%)
BTC volatility remains low and its quiet Christmas period runs through into the new year.
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.
