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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7272 (+142 or +1.99%)
The ASX joined in the global equity rally on Friday to close the week higher.
VOLATILITY ALERTS:
Weds 11:30 – GDP Q/q
For a move higher we would like to see the ASX close above 7272. Should this occur, a move into 7400 could be expected; and if momentum is strong we cannot rule out moves to 7485 and 7545.
Failure to close above 7272 means a potential move back into 7200. 7095 is the next support level down if 7200 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7000.
EUROPE
DAX – 14544 (+474 or +3.37%)
The DAX ripped higher and now has the late March high in its sight.
For the DAX to move higher we would like to see it hold above 14140. Should this occur then 14780 is the next level ahead. If upside momentum is strong then 15050 and 15345 cannot be ruled out.
To the downside, should we not see it hold above 14140, we will look for a move into support at 13610. A strong break and close below this handle and 13250 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 4151 (+264 or +6.79%)
The SPX made its biggest weekly gain since September 2020 and it’s first weekly gain in 8 attempts.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Thurs 00:00 – Jolts Jobs Openings and ISM Manufacturing PMI
Fri 22:30 – Non Farm Payrolls
For a move higher we would like to see the S&P hold above 4140. Should this occur, we will look for a move to 4235; and if momentum is strong we cannot rule out moves to 4285 and 4375.
If we cannot close above 4140, we could see this market move down into 4035. A break of this level however may result in a quick move down to 3965, and if momentum to the downside remains strong we may see a fast move back down to 3870.
FOREX
AUD/USD – 0.7159 (+117 or +1.66%)
The Aussie Dollar enjoyed the rally in global risk on Friday to pierce through key resistance – can this move be sustained?
VOLATILITY ALERTS:
Weds 11:30 – GDP Q/q
For a move higher this week, we would like to see it hold above 0.7100. We will then be targeting a move through 0.7170. If we see a strong break and close above this level then we can’t rule out a move to 0.7220. Should momentum to the upside be really strong then 0.7270 could be targeted.
If this market cannot hold above 0.7100, we could see a move down into 0.7060. A strong break of this level may result in a move into 0.6995, however, any weakness below this level could see a sharp drop into 0.6930.
EUR/USD – 1.0730 (+169 or +1.6%)
As the ECB starts to tilt more hawkish, Euro buyers are back in the room.
VOLATILITY ALERTS:
Weds 21:00 – ECB President Lagarde Speaks
For a move higher we would like to see the Euro hold above 1.0645. Should this occur we could see a move into 1.0755. A break of this level could see this market rally further to 1.0805 and 1.093.
If the EURO cannot hold above 1.0645, we will see a move into 1.0575. A strong break of this level may result in a move into 1.05, however, any weakness below this level could see a sharp drop into parity at 1.0355.
GBP/USD – 1.2628 (+136 or +1.09%)
The GBP enjoyed another rally this week as the USD started to retreat – with traders considering a ‘less hawkish than expected’ Fed.
VOLATILITY ALERTS:
Tues 02:15 – BoE Governor Bailey speaks
For a move to the upside, we would like to see Cable hold above 1.2585 before a break higher into 1.2678. If this market can see a strong close above this level we may then see a strong push back into 1.2855. If upside momentum is really strong then a move back into 1.3000 can’t be ruled out.
Should we fail to hold above 1.2585, we will look for a move down to 1.2392. A break below this level however could see Cable further depreciate to 1.2250 by the week’s end and if momentum is very weak we cannot rule out a move to 1.2160.
USD/JPY – 127.10 (-80 or -0.63%)
The Dollar Yen closed lower for the third straight week as it appears the incredible bull run may have ended.
VOLATILITY ALERTS:
Weds 00:00 – CB Consumer Confidence
Thurs 00:00 – Jolts Jobs Openings and ISM Manufacturing PMI
Fri 22:30 – Non Farm Payrolls
For a move to the upside we must now see this market close above 127.75. Should this occur we will look for a move into 129, and if upside momentum is strong we could see a move higher into 130.85 and potentially 132.35.
If we cannot close above 127.75, we could see a move back to test 125.85 before a pause to the downside. A break below this level may result in a sharp move lower into 125.20, and any further breaks to the downside may see a bigger move into 123.65.
COMMODITIES
GOLD – 1852 (+7 or +0.38%)
Flat week for Gold so our levels remain unchanged.
VOLATILITY ALERTS:
Fri 22:30 – Non Farm Payrolls
For a move higher we need to see this market hold above 1830. Should this occur we could see a move into 1875, and any break of this level could see a stronger move into 1900. If momentum is strong then 1915 cannot be ruled out.
If Gold cannot hold above 1830, we will look for a move back down to 1800. A break below this level could see a move lower into 1785, and if momentum is very strong to the downside we could see a move to 1750.
CRYPTOS
BITCOIN – 28698 (-610 or -2.08%)
While there was downside pressure across the crypto space this week, BTC held firm at the recent range lows.
For a move higher we must now see this market close above 30000. Should this occur we could see a move into 33000 before retesting 35000. If upside momentum is really strong then we can’t rule out 37265.
Failure to close above 30000 could see a move into 28500. If selling pressure takes control then we could see a move down to 27000. A close below this level and 25875 can’t be ruled out, maybe even a 23675 print.
