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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7349 (-83 or -1.12%)
The ASX moved lower for the second straight week as global markets weighed heavily on sentiment.
VOLATILITY ALERTS:
Weds 11:30 – Wage Price Index q/q
For a move higher we would like to see the ASX close above 7350. Should this occur, a move above 7440 should be expected; and if momentum is strong we cannot rule out moves to 7495 and 7555.
Failure to close above 7350 means a potential move into 7310. 7215 is the next support level down if 7310 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7135.
EUROPE
DAX – 15334 (+192 or +1.25%)
The DAX moved slightly higher but is still found trading within its recent range.
VOLATILITY ALERTS:
Tues 21:00 – German ZEW Economic Sentiment
For the DAX to move higher we would like to see it hold above 15515. Should this occur then 15730 is the next level ahead. If upside momentum is strong then 15970 and 16260 cannot be ruled out.
To the downside, should we not see it hold above 15515, we will look for a move into support at 15325. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14915 cannot be ruled out.
US
S&P 500 – 4077 (-12 or -0.29%)
A mixed week for the SPX as investors weighed up hawkish messages from Fed officials and several data beats.
VOLATILITY ALERTS:
Weds 01:45 – Flash Services PMI
Thurs 18:00 – FOMC Meeting Minutes
Fri 00:30 – Prelim GDP q/q
Sat 00:30 – Core PCE Price Index m/m
For a move higher we would like to see the S&P close above 4095. Should this occur, we will look for a move to 4145; and if momentum is strong we cannot rule out moves to 4215 and 4320.
If we cannot close above 4095, we could see this market move down into 4040. 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 – 0.6878 (-40 or -0.58%)
The Aussie Dollar edged lower although Friday’s reversal pin bar and long wick suggest there are buyers there.
VOLATILITY ALERTS:
Weds 11:30 – Wage Price Index q/q
For a move higher this week we would like to see it hold above 0.6870. We will then be targeting a move through 0.6915. If we see a strong break and close above this level then we can’t rule out a move to 0.6960. Should momentum to the upside be really strong then 0.7000 could be targeted.
If this market cannot hold above 0.6870, we could see a move down into 0.6830. A strong break of this level may result in a move into 0.6715, however any weakness below this level could see a sharp drop into 0.6670.
EUR/USD – 1.0693 (+16 or +0.15%)
A completely flat week for the Euro and our levels remain the same.
VOLATILITY ALERTS:
Tues 21:00 – German ZEW Economic Sentiment
For a move higher we would like to see the Euro close above 1.0760. Should this occur we could see a move into 1.0940. A break of this level could see this market rally further to 1.1115 and 1.1180.
If the EURO cannot close above 1.0760 we will see a move into 1.0600. A strong break of this level may result in a move into 1.0470, however, any weakness below this level could see a move into parity at 1.0355.
GBP/USD – 1.2040 (-14 or -0.12%)
Another flat week for the Cable despite the downside breakout of the rising channel, which must be watched closely.
VOLATILITY ALERTS:
Tues 20:30 – Flash Manufacturing PMI & Flash Services PMI
For a move to the upside, we would like to see Cable close 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 close 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 – 134.13 (+270 or +2.05%)
Dollar Yen continues to trend higher but now must see a daily breakout of the Jan highs.
VOLATILITY ALERTS:
Weds 01:45 – Flash Services PMI
Thurs 18:00 – FOMC Meeting Minutes
Fri 00:30 – Prelim GDP q/q
Sat 00:30 – Core PCE Price Index m/m
For a move to the upside we must now see this market hold 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 hold 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 126.90.
COMMODITIES
GOLD – 1841 (-24 or -1.29%)
Gold drifts lower as sellers have been quick to jump into any rally.
VOLATILITY ALERTS:
Weds 01:45 – Flash Services PMI
Thurs 18:00 – FOMC Meeting Minutes
Fri 00:30 – Prelim GDP q/q
Sat 00:30 – Core PCE Price Index m/m
For a move higher we need to see this market close above 1850. Should this occur we could see a move into 1870; and any break of this level could see a stronger move into 1895. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot close 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 1785.
CRYPTOS
BITCOIN – 24680 (+2678 or +12.17%)
BTC enjoyed a strong early week rally before quietening down – clearing the August highs will be in the eyes of bulls from here.
For a move higher we must now see this market hold above 23675. Should this occur we could see a move into 25875 before retesting 28000. If upside momentum is really strong then we can’t rule out 31000.
Failure to hold above 23675 could see a move into 21715. If selling pressure takes control then we could see a move down to 20000. A close below this level and 18700 can’t be ruled out, maybe even a 17500 print.
