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Early 2024 Challenges: Japan Earthquake and Market Dynamics

The start of 2024 unfolds with a seismic event in Japan and nuanced market dynamics. Following a U.S. stock retreat, uncertainties arise, posing challenges for global markets.

How will the market reconcile the gap between rate cut expectations and the Fed's projections, given the dual challenges of seismic events and market shifts in 2024?

Read below what our desk thinks, and the important levels to watch this week.

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7636 (+202 or +2.72%)

Up 2% the ASX is hitting its all time highs, will the momentum continue?

VOLATILITY ALERTS:

Thur 11:30 – AUD Judo Bank Services PMI

For a move to the upside, we must now see this market close above 7806. Should this occur, we will look for a move into 7967, and if the upside momentum is strong, we could see a move higher into 8129 and potentially 8436.

If we cannot close above 7610, we could see a move back to test 7450 before a pause to the downside. A break below this level may result in a sharp move lower into 7290, and any further breaks to the downside may see a bigger move into 6983.

EUROPE

DAX (30) – 16798 (+35 or +0.21%)

The DAX is holding above its all time highs, will the momentum continue?

VOLATILITY ALERTS:

Tue 20:00 – EUR PMI

Fri 21:00 – EUR CPI

For a move to the upside, we must now see this market close above 17148. Should this occur, we will look for a move into 17698, and if the upside momentum is strong, we could see a move higher into 18248 and potentially 19248.

If we cannot close above 16448, we could see a move back to test 15998 before a pause to the downside. A break below this level may result in a sharp move lower into 15248, and any further breaks to the downside may see a bigger move into 14248.

US

S&P 500 – 4778 (+48 or +1.01%)

The SPX500 has continued its up trend closing above recent highs.

VOLATILITY ALERTS:

Wed 01:45 – USD PMI

Thur 02:00 – USD FOMC Minutes

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 4890. Should this occur, we will look for a move into 5047, and if the upside momentum is strong, we could see a move higher into 5204 and potentially 5485.

If we cannot close above 4789, we could see a move back to test 4667 before a pause to the downside. A break below this level may result in a sharp move lower into 4550, and any further breaks to the downside may see a bigger move into 4316.

FOREX

AUD/USD – 0.6810 (+108 or +1.61%)

AUDUSD has seen a multi day uptrend, will the trend continue through the new year?

VOLATILITY ALERTS:

Thur 11:30 – AUD Judo Bank Services PMI

Wed 01:45 – USD PMI

Thur 02:00 – USD FOMC Minutes

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 0.6827. Should this occur, we will look for a move into 0.6855, and if the upside momentum is strong, we could see a move higher into 0.6882 and potentially 0.6938.

If we cannot close above 0.6794, we could see a move back to test 0.6767 before a pause to the downside. A break below this level may result in a sharp move lower into 0.6740, and any further breaks to the downside may see a bigger move into 0.6694.

EUR/USD – 1.1035 (+139 or +1.28%)

The EURUSD has found support above its most recent highs.

VOLATILITY ALERTS:

Tue 20:00 – EUR PMI

Fri 21:00 – EUR CPI

Wed 01:45 – USD PMI

Thur 02:00 – USD FOMC Minutes

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 1.1057. Should this occur, we will look for a move into 1.1085, and if the upside momentum is strong, we could see a move higher into 1.1112 and potentially 1.1168.

If we cannot close above 1.1008, we could see a move back to test 1.0982 before a pause to the downside. A break below this level may result in a sharp move lower into 1.0958, and any further breaks to the downside may see a bigger move into 1.0908.

GBP/USD – 1.2721 (+49 or +0.39%)

GBPUSD has closed higher this week following the current market trends.

VOLATILITY ALERTS:

Wed 01:45 – USD PMI

Thur 02:00 – USD FOMC Minutes

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 1.2755. Should this occur, we will look for a move into 1.2808, and if the upside momentum is strong, we could see a move higher into 1.2861 and potentially 1.2987.

If we cannot close above 1.2702, we could see a move back to test 1.2650 before a pause to the downside. A break below this level may result in a sharp move lower into 1.2576, and any further breaks to the downside may see a bigger move into 1.2449.

USD/JPY – 141.29 (-112 or -0.79%)

After hitting the yearly highs, the USDJPY has seen a sharp decline.

VOLATILITY ALERTS:

Fri 16:00 – JPY Consumer Confidence

Wed 01:45 – USD PMI

Thur 02:00 – USD FOMC Minutes

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 141.69. Should this occur, we will look for a move into 142.07, and if the upside momentum is strong, we could see a move higher into 142.46 and potentially 143.11.

If we cannot close above 140.93, we could see a move back to test 140.21 before a pause to the downside. A break below this level may result in a sharp move lower into 139.64, and any further breaks to the downside may see a bigger move into 138.89.

COMMODITIES

GOLD – 2065 (+48 or +2.38%)

Gold is finding support after a volatile week of breaking the highs.

For a move to the upside, we must now see this market close above 2116. Should this occur, we will look for a move into 2176, and if the upside momentum is strong, we could see a move higher into 2236 and potentially 2318.

If we cannot close above 2064, we could see a move back to test 2013 before a pause to the downside. A break below this level may result in a sharp move lower into 1962, and any further breaks to the downside may see a bigger move into 1865.

CRYPTOS

BITCOIN – 44813 (+3582 or +8.69%)

It’s the start of the year and Bitcoin has started to move higher. Will this trend continue?

For a move to the upside, we must now see this market close above 45914. Should this occur, we will look for a move into 46656, and if the upside momentum is strong, we could see a move higher into 47499 and potentially 48641.

If we cannot close above 44810, we could see a move back to test 44069 before a pause to the downside. A break below this level may result in a sharp move lower into 43226, and any further breaks to the downside may see a bigger move into 41984.

DISCLAIMER

The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, hold or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View accepts no responsibility for any use that may be made of these comments for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.