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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6892 (-212 or -2.98%)
The ASX trend lower continues with mounting fears of a US recession.
For a move higher we would like to see the ASX close firmly above 6915. Should this occur, a move above 7030 should be expected, and if momentum is strong we cannot rule out moves to 7135 and 7215..
Failure to close above 6915 means a potential move into 6810. 6765 is the next support level down if 6810 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6645.
EUROPE
DAX – 14767 (-525 or -3.43%)
Volatile week for the DAX and key range lows now broken.
VOLATILITY ALERTS:
Fri 19:30 – German Flash Manufacturing and Services PMI
For the DAX to move higher we would like to see it close above 14915. Should this occur then 15050 is the next level ahead. If upside momentum is strong then 15325 and 15515 cannot be ruled out.
To the downside, should we not see it close above 14915, we will look for a move into support at 14710. A strong break and close below this handle and 14445 is the next level down. If downside pressure mounts then 13975 cannot be ruled out.
US
S&P 500 – 3915 (+39 or +1.01%)
The SPX gained for the week despite the fallout from SVB’s collapse and Credit Suisse’s turbulence.
VOLATILITY ALERTS:
Thurs 05:00 – FOMC Interest Rate Decision and Economic Projections
Thurs 05:30 – FOMC Press Conference
For a move higher we would like to see the S&P close firmly above 3915. Should this occur, we will look for a move to 3965, and if momentum is strong we cannot rule out moves to 3965 and 4095.
If we cannot close firmly above 3915, we could see this market move down into 3810. A break of this level, however, may result in a quick move down to 3715; and if momentum to the downside remains strong we may see a fast move back down to 3635.
FOREX
AUD/USD – 0.6699 (+118 or +1.79%)
The Aussie Dollar followed the SPX higher, though sellers will aim to remain in control at key resistance.
For a move higher this week we would like to see it close above 0.6715. We will then be targeting a move through 0.6825. If we see a strong break and close above this level then we can’t rule out a move to 0.6870. Should momentum to the upside be really strong then 0.6915 could be targeted.
If this market cannot hold above 0.6715, we could see a move down into 0.6670. A strong break of this level may result in a move into 0.6585, however, any weakness below this level could see a sharp drop into 0.6525.
EUR/USD – 1.0664 (+25 or +0.23%)
Mixed week for the Euro as Credit Suisse issues weighed on sentiment while the ECB still hiked by 50bps.
VOLATILITY ALERTS:
Fri 00:15 – ECB Interest Rate Decision
Fri 00:45 – ECB Press Conference
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 1.0280.
GBP/USD – 1.2177 (+146 or +1.21%)
The Cable also climbed as flow went out of the USD with central bank divergence now flipping directions.
VOLATILITY ALERTS:
Weds 18:00 – UK CPI Y/y
Thurs 23:00 – BoE Interest Rate Decision and Monetary Policy Statement
Fri 18:00 – UK Retail Sales
For a move to the upside, we would like to see Cable hold 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 hold 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 – 131.84 (-324 or -2.4%)
The Yen was bid as investors ‘fly to safety’ with the looming banking crises the dominant theme.
VOLATILITY ALERTS:
Thurs 05:00 – FOMC Interest Rate Decision and Economic Projections
Thurs 05:30 – FOMC Press Conference
Sat 00:45 – Flash Manufacturing and Services PMI
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 137.55 and potentially 139.45.
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 127.20.
COMMODITIES
GOLD – 1987 (+120 or +6.43%)
Incredible move on the ‘safe haven’ that is Gold… a key psychological handle is within striking distance.
VOLATILITY ALERTS:
Thurs 05:00 – FOMC Interest Rate Decision and Economic Projections
Thurs 05:30 – FOMC Press Conference
For a move higher we need to see this market hold above 1960. Should this occur we could see a move into 2000; and any break of this level could see a stronger move into 2014. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot hold above 1850, we can see a move down to 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 2070.
CRYPTOS
BITCOIN – 27680 (+7090 or +34.43%)
We have a new narrative… BTC is the new ‘safe currency’ outside of the failing banking system – and off it goes!
For a move higher we must now see this market close 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 close 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.
