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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7370 (+193 or +2.69%)
Another strong week sees the ASX re-testing its early December high, a break through here could be significant.
VOLATILITY ALERTS:
Thurs 11:30 – Unemployment Rate
For a move higher we would like to see the ASX hold above 7350. Should this occur, a move into 7440 could be expected, and if momentum is strong we cannot rule out moves to 7495 and 7620.
Failure to hold above 7350 means a potential move into 7300. 7240 is the next support level down if 7300 doesn’t hold. If downside momentum is really strong then we could see another leg down into 7140.
EUROPE
DAX – 15151 (+487 or +3.32%)
A sea of green for the DAX so far this year, but are things getting a bit over-stretched here?
For the DAX to move higher we would like to see it hold above 15050. Should this occur then 15325 is the next level ahead. If upside momentum is strong then 15515 and 15730 cannot be ruled out.
To the downside, should we not see it hold above 15050, we will look for a move into support at 14915. A strong break and close below this handle and 14710 is the next level down. If downside pressure mounts then 14625 cannot be ruled out.
US
S&P 500 – 3999 (+108 or +2.78%)
The SPX is back to retest its 200 DMA and downtrend line resistance – stick or twist?
VOLATILITY ALERTS:
Weds 00:30 – Empire State Manufacturing Index
Thurs 00:30 – PPI, Core PPI y/y and Retail Sales m/m
For a move higher we would like to see the S&P hold above 3965. Should this occur, we will look for a move to 4095; and if momentum is strong we cannot rule out moves to 4145 and 4215.
If we cannot hold above 3965, we could see this market move down into 3915. A break of this level however may result in a quick move down to 3840; and if momentum to the downside remains strong we may see a fast move back down to 3740.
FOREX
AUD/USD – 0.6975 (+110 or +1.6%)
The Aussie Dollar continues to mirror the SPX but now looks to have secured a breakout of its own.
VOLATILITY ALERTS:
Thurs 11:30 – Unemployment Rate
For a move higher this week we would like to see it hold above 0.6965. We will then be targeting a move through 0.7000. If we see a strong break and close above this level then we can’t rule out a move to 0.7050. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot hold above 0.6965, we could see a move down into 0.6915. 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 0.6715.
EUR/USD – 1.0833 (+190 or +1.79%)
The Market’s reaction to cooling inflation in the US has been to continue selling USD… is that the right call?
For a move higher we would like to see the Euro hold 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 hold 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 – 1.2233 (+141 or +1.17%)
The Cable moves higher but doesn’t look entirely convincing.
VOLATILITY ALERTS:
Tues 02:00 – BoE Gov Bailey speaks
Tues 18:00 – Claimant Count change
Weds 18:00 – CPI Y/y
Fri 18:00 – Retail sales M/m
For a move to the upside, we would like to see Cable hold 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 hold 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 – 127.85 (-465 or -3.52%)
The BoJ are (finally) becoming interesting, with Yen strength reflecting speculation of a hawkish pivot – sets up an important meeting this week.
VOLATILITY ALERTS:
Weds – BoJ Interest Rate Decision, Monetary Policy Statement & Press Conference
Weds 00:30 – Empire State Manufacturing Index
Thurs 00:30 – PPI, Core PPI y/y and Retail Sales m/m
For a move to the upside, we must now see this market hold above 126.90. Should this occur we will look for a move into 125, and if upside momentum is strong we could see a move higher into 123.60 and potentially 121.70.
If we cannot hold above 126.90, we could see a move back to test 125 before a pause to the downside. A break below this level may result in a sharp move lower into 123.60, and any further breaks to the downside may see a bigger move into 121.70.
COMMODITIES
GOLD – 1920 (+55 or +2.95%)
The Fed keeps hiking and Gold keeps rising… a nice round number (beginning with 2) now appears back within reach.
VOLATILITY ALERTS:
Weds 00:30 – Empire State Manufacturing Index
Thurs 00:30 – PPI, Core PPI y/y and Retail Sales m/m
For a move higher we need to see this market hold above 1910. Should this occur we could see a move into 1930; and any break of this level could see a stronger move into 1960. If momentum is strong then 1990 cannot be ruled out.
If Gold cannot hold above 1910, we need to see it hold at 1895. A break below this level could see a move lower into 1870; and if momentum is very strong to the downside we could see a move to 1850.
CRYPTOS
BITCOIN – 20720 (+3767 or +22.23%)
A ripping week for BTC sees it record its biggest gain since March last year.
For a move higher we must now see this market hold 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 hold above 20000 could see a move into 18700. If selling pressure takes control then we could see a move down to 17500. A close below this level and 15515 can’t be ruled out, maybe even a 14000 print.
