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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6340 (-471 or -6.92%)
The ASX was sold aggressively for the second week running with buyers completely disappearing.
VOLATILITY ALERTS:
Tues 10:00 – RBA Gov Lowe speaks
Tues 11:30 – Monetary Policy Meeting Minutes
For a move higher we would like to see the ASX close above 6400. Should this occur, a move into 6500 could be expected; and if momentum is strong we cannot rule out moves to 6550 and 6650.
Failure to close above 6400 means a potential move into 6250. 6095 is the next support level down if 6250 doesn’t hold. If downside momentum is really strong then we could see another leg down into 5860.
EUROPE
DAX – 13161 (-668 or -4.83%)
The DAX still remains above its yearly low from Feb but for how much longer?
VOLATILITY ALERTS:
Thurs 17:30 – German Flash Manufacturing and Services PMI
For the DAX to move higher we would like to see it close 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 close 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 – 3680 (-228 or -5.83%)
Bears remain in full control of US equities with every rally being sold into.
VOLATILITY ALERTS:
Weds 00:00 – Existing Home Sales
Weds 23:30 – Fed Chair Powell speaks
Fri 00:00 – Fed Chair Powell speaks
For a move higher we would like to see the S&P close above 3725. Should this occur, we will look for a move to 3830; and if momentum is strong we cannot rule out moves to 3870 and 3965.
If we cannot close above 3725, we could see this market move down into 3665. A break of this level however may result in a quick move down to 3585, and if momentum to the downside remains strong we may see a fast move back down to 3470.
FOREX
AUD/USD – 0.6935 (-106 or -1.51%)
With equities continuing to be sold, the Aussie Dollar is also struggling to catch a break – despite some USD weakness.
VOLATILITY ALERTS:
Tues 10:00 – RBA Gov Lowe speaks
Tues 11:30 – Monetary Policy Meeting Minutes
For a move higher this week, we would like to see it close above 0.6945. We will then be targeting a move through 0.6995. If we see a strong break and close above this level then we can’t rule out a move to 0.7060. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot close above 0.6945, we could see a move down into 0.6900. A strong break of this level may result in a move into 0.6830, however, any weakness below this level could see a sharp drop into 0.6755.
EUR/USD – 1.0493 (-20 or -0.19%)
A relatively flat week for the Euro despite a midweek emergency ECB meeting.
VOLATILITY ALERTS:
Mon 23:00 – ECB President Lagarde speaks
For a move higher we would like to see the Euro close above 1.0500. Should this occur we could see a move into 1.0570. A break of this level could see this market rally further to 1.0645 and 1.0755.
If the EURO cannot close above 1.0500, we will see a move into 1.0445. A strong break of this level may result in a move into 1.0355, however, any weakness below this level could see a sharp drop into parity at 1.0215.
GBP/USD – 1.2215 (-92 or -0.75%)
The Cable saw its post-BoE rally fade on Friday as stagflation continues to hit the UK economy hard.
VOLATILITY ALERTS:
Weds 16:00 – CPI Y/y
Fri 16:00 – Retail Sales M/m
For a move to the upside, we would like to see Cable hold above 1.2160 before a break higher into 1.2245. If this market can see a strong close above this level we may then see a strong push back into 1.2390. If upside momentum is really strong then a move back into 1.2580 can’t be ruled out.
Should we fail to hold above 1.2160, we will look for a move down to 1.2075. A break below this level however could see Cable further depreciate to 1.1955 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1825.
USD/JPY – 134.94 (+61 or +0.45%)
The BoJ continues to do… nothing – so what’s to stop the USDJPY from continuing to make new multi-decade highs?
VOLATILITY ALERTS:
Weds 00:00 – Existing Home Sales
Weds 23:30 – Fed Chair Powell speaks
Fri 00:00 – Fed Chair Powell speaks
For a move to the upside, we must now see this market hold above 134.55. Should this occur we will look for a move into 135.3, and if upside momentum is strong we could see a move higher into 137.2 and potentially 139.3.
If we cannot hold above 134.55, we could see a move back to test 133.72 before a pause to the downside. A break below this level may result in a sharp move lower into 132.35, and any further breaks to the downside may see a bigger move into 130.85.
COMMODITIES
GOLD – 1840 (-31 or -1.66%)
Gold edged lower but still remains mainly range-bound as rallies continue to be sold.
For a move higher we need to see this market close above 1850. 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 close above 1850, we will look for a move back down to 1830. A break below this level could see a move lower into 1800, and if momentum is very strong to the downside we could see a move to 1785.
CRYPTOS
BITCOIN – 18315 (-11202 or -37.95%)
A really ugly chart now with an ongoing crash threatening mass liquidation across the crypto markets.
For a move higher we must now see this market close above 20000. Should this occur we could see a move into 21715 before retesting 23675. If upside momentum is really strong then we can’t rule out 25875.
Failure to close above 20000 could see a move into 17560. If selling pressure takes control then we could see a move down to 14000. A close below this level and 12320 can’t be ruled out, maybe even a 10700 print.
