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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7211 (+263 or +3.79%)
Strong week for equity markets as the risk-on flavour returned.
VOLATILITY ALERTS:
Thurs 12:30 – RBA Gov Lowe speaks
For a move higher we would like to see the ASX hold above 7135. Should this occur, a move above 7310 should be expected; and if momentum is strong we cannot rule out moves to 7385 and 7465.
Failure to hold above 7135 means a potential move into 7030. 6915 is the next support level down if 7030 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6765.
EUROPE
DAX – 15645 (+620 or +4.13%)
The banking crisis now seems a thing of the past as markets look past it to refocus on a slowdown in the rate hiking cycle.
For the DAX to move higher we would like to see it hold above 15515. Should this occur then 15650 is the next level ahead. If upside momentum is strong then 15820 and 15970 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 15025 is the next level down. If downside pressure mounts then 14800 cannot be ruled out.
To the downside, should we not see it hold above 14915, we will look for a move into support at 14710. A strong break and close below this handle and 14445 is the next level down. If downside pressure mounts then 13975 cannot be ruled out.
US
S&P 500 – 4109 (+131 or +3.29%)
The SPX finished the month and quarter in a positive fashion as tech continues to outperform (Nasdaq is now in a ‘technical bull market’ up 20% from the lows).
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – JOLTS Job Openings
Weds 22:15 – ADP Non-Farm Employment Change
Fri 22:30 – Average Hourly Earnings m/m & Non-Farm Payrolls
For a move higher we would like to see the S&P hold 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 hold above 4095, we could see this market move down into 3965. A break of this level, however, may result in a quick move down to 3915; and if momentum to the downside remains strong we may see a fast move back down to 3810.
FOREX
AUD/USD – 0.6685 (+43 or +0.65%)
The Aussie Dollar is enjoying some sideways consolidation right now and didn’t really go anywhere for a second straight week.
VOLATILITY ALERTS:
Thurs 12:30 – RBA Gov Lowe speaks
For a move higher this week we would like to see it hold 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 0.6825. Should momentum to the upside be really strong then 0.6870 could be targeted.
If this market cannot hold above 0.6670, we could see a move down into 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 – 1.0841 (+81 or +0.75%)
The Euro edged higher but met resistance at the previous week’s high – can it breakthrough?
VOLATILITY ALERTS:
Fri 22:30 – U.S. Average Hourly Earnings m/m & Non-Farm Payrolls
For a move higher we would like to see the Euro hold above 1.0760. Should this occur we should see a move above 1.0940. A break of this level could see this market rally further to 1.1115 and 1.1215.
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 1.0355.
GBP/USD – 1.2329 (+100 or +0.82%)
The Cable is facing the resistance of its own after climbing into the late 2022 highs…
For a move to the upside, we would like to see Cable hold above 1.2275 before a break higher into 1.2400. If this market can see a strong close above this level we may then see a strong pushback into 1.2600 If upside momentum is really strong then a move back into 1.2755 can’t be ruled out.
Should we fail to hold above 1.2275, we will look for a move down to 1.2145. A break below this level however could see Cable further depreciate to 1.1930 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1740.
USD/JPY – 132.82 (+211 or +1.61%)
Flow back out of the Yen as the banking crisis recedes has contributed towards a bounce in the Dollar Yen, despite general USD weakness across the board.
VOLATILITY ALERTS:
Tues 00:00 – ISM Manufacturing PMI
Weds 00:00 – JOLTS Job Openings
Weds 22:15 – ADP Non-Farm Employment Change
Fri 22:30 – Average Hourly Earnings m/m & Non-Farm Payrolls
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 139.10.
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 127.20.
COMMODITIES
GOLD – 1969 (-9 or -0.46%)
Another move lower for Gold and with a failure to break through 2000, questions start to be asked whether a near term top is in.
VOLATILITY ALERTS:
Fri 22:30 – Average Hourly Earnings m/m & Non-Farm Payrolls
For a move higher we need to see this market hold above 1960. Should this occur we could see a move into 2000; and any break of this level could see a stronger move into 2014. If momentum is strong then 1910 cannot be ruled out.
If Gold cannot hold 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 2070.
CRYPTOS
BITCOIN – 28926 (+1006 or +3.6%)
Quiet week for BTC… which can be taken as a positive for bulls in a week packed full of macro events causing volatility elsewhere.
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.
