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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7270 (+7 or +0.1%)
Another sideways week for the ASX and our levels are unchanged.
For a move higher we would like to see the ASX close above 7310. Should this occur, a move above 7385 should be expected, and if momentum is strong we cannot rule out moves to 7465 and 7555.
Failure to close above 7310 means a potential move into 7215. 7135 is the next support level down if 7215 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7030.
EUROPE
DAX (40) – 16289 (+378 or +2.38%)
The DAX ripped to new all-time highs with an astonishing week of buying momentum.
VOLATILITY ALERTS:
Tues 17:30 – German Flash Manufacturing and Services PMI
For the DAX to move higher we would like to see it hold above 16270. Should this occur then 16470 is the next level ahead. If upside momentum is strong then 16800 and 17267 cannot be ruled out.
To the downside, should we not see it hold above 16270, we will look for a move into support at 16090. A strong break and close below this handle and 15970 is the next level down. If downside pressure mounts then 15820 cannot be ruled out.
US
S&P 500 – 4185 (+67 or +1.63%)
The SPX is breaking higher as the US debt ceiling agreement edges closer.
VOLATILITY ALERTS:
Tues 23:45 – Flash Manufacturing and Services PMI
Thurs 04:00 – FOMC Meeting Minutes
Thurs 22:30 – Prelim GDP q/q and Unemployment Claims
Fri 22:30 – Core PCE Price Index m/m
For a move higher we would like to see the S&P hold above 4150. Should this occur, we will look for a move through 4215, and if momentum is strong we cannot rule out moves to 4320 and 4425.
If we cannot hold above 4150, we could see this market move down into 4095. 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 3915.
FOREX
AUD/USD – 0.6649 (+9 or +0.14%)
The Aussie Dollar had a quiet week and our levels remain the same.
For a move higher this week we would like to see it close above 0.6670. We will then be targeting a move through 0.6715. If we see a strong break and close above this level then we can’t rule out a move to 0.6755. Should momentum to the upside be really strong then 0.6825 could be targeted.
If this market cannot close above 0.6670, we could see a move down to 0.6585. A strong break of this level may result in a move into 0.6525, however, any weakness below this level could see a sharp drop into 0.6385.
EUR/USD – 1.0805 (-44 or -0.41%)
A new Dollar bull run is on the cards but the Euro held firm at key support on Friday.
VOLATILITY ALERTS:
Tues 17:15 – French Flash Manufacturing and Services PMI
Tues 17:30 – German Flash Manufacturing and Services PMI
For a move higher we would like to see the Euro close above 1.0940. Should this occur we should see a move above 1.1115. A break of this level could see this market rally further to 1.1215 and 1.1385.
If the EURO cannot close above 1.0940 we will see a move into 1.0760. A strong break of this level may result in a move into 1.0600, however, any weakness below this level could see a move into 1.0470.
GBP/USD – 1.2448 (-2 or -0.02%)
The Cable closed almost flat to the point so our levels are unchanged.
VOLATILITY ALERTS:
Tues 18:30 – UK Flash Manufacturing and Services PMI
For a move to the upside, we would like to see Cable close above 1.2600 before a break higher into 1.2755. If this market can see a strong close above this level we may then see a strong pushback into 1.2975 If upside momentum is really strong then a move back into 1.3160 can’t be ruled out.
Should we fail to close above 1.2600, we will look for a move down to 1.2405. A break below this level however could see Cable further depreciate to 1.2275 by the week’s end. And if momentum is very weak we cannot rule out a move to 1.2145.
USD/JPY – 137.97 (+225 or +1.66%)
Strong week for the Dollar Yen and now must hold above the double top highs for a continued move higher.
VOLATILITY ALERTS:
Tues 23:45 – US Flash Manufacturing and Services PMI
Thurs 04:00 – FOMC Meeting Minutes
Thurs 22:30 – Prelim GDP q/q and Unemployment Claims
Fri 22:30 – Core PCE Price Index m/m
For a move to the upside, we must now see this market hold above 137.55. Should this occur we will look for a move into 139.10, and if upside momentum is strong we could see a move higher into 140.30 and potentially 142.25.
If we cannot hold above 137.55, 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 – 1977 (-33 or -1.64%)
Gold looks weak below the 2000 level and there are now questions about whether the recent bull run is over.
VOLATILITY ALERTS:
Thurs 04:00 – FOMC Meeting Minutes
Fri 22:30 – Core PCE Price Index m/m
For a move higher we need to see this market close above 2000. Should this occur we could see a move into 2015; and any break of this level could see a stronger move into 2030. If momentum is strong then 2050 cannot be ruled out.
If Gold cannot close above 2000, we can see a move down to 1960. A break below this level could see a move lower into 1910; and if momentum is very strong to the downside we could see a move to 1872.
CRYPTOS
BITCOIN – 26954 (+43 or +0.16%)
Very quiet week by Bitcoin’s standards and our levels remain the same.
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.
