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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6683 (+343 or +5.41%)
Risk bounces back and now the ASX will look to gap fill from the Monday open.
For a move higher we would like to see the ASX hold above 6650. Should this occur, a move into 6745 could be expected; and if momentum is strong we cannot rule out moves to 6875 and 6980.
Failure to hold above 6650 means a potential move into 6550. 6500 is the next support level down if 6400 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6250.
EUROPE
DAX – 13213 (+52 or +0.4%)
The DAX underperformed its peers last week to end the week almost flat.
For the DAX to move higher we would like to see it close above 13250. Should this occur then 13600 is the next level ahead. If upside momentum is strong then 14140 and 14780 cannot be ruled out.
To the downside, should we not see it close above 13250, we will look for a move into support at 12965. A strong break and close below this handle and 12635 is the next level down. If downside pressure mounts then 12445 cannot be ruled out.
US
S&P 500 – 3911 (+231 or +6.28%)
The SPX ripped higher on Friday as rate hike expectations fell lower – another short opportunity for bears?
VOLATILITY ALERTS:
Mon 22:30 – Core Durable Goods Orders M/m
Tues 00:00 – Pending Home Sales M/m
Weds 00:00 – CB Consumer Confidence
Weds 23:30 – Fed Chair Powell speaks
Thurs 22:30 – Core PCE Index M/m
For a move higher we would like to see the S&P hold above 3870. Should this occur, we will look for a move to 3965; and if momentum is strong we cannot rule out moves to 4035 and 4085.
If we cannot hold above 3870, we could see this market move down into 3830. A break of this level however may result in a quick move down to 3725, and if momentum to the downside remains strong we may see a fast move back down to 3665.
FOREX
AUD/USD – 0.6935 (-106 or -1.51%)
The Aussie Dollar spent the way sideways with the double bottom lows still perilously close.
For a move higher this week, we would like to see it close above 0.6945. We will then be targeting a move through 0.6995. If we see a strong break and close above this level then we can’t rule out a move to 0.7060. Should momentum to the upside be really strong then 0.7100 could be targeted.
If this market cannot close above 0.6945, we could see a move down into 0.6900. 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 0.6755.
EUR/USD – 1.0493 (+61 or +0.58%)
The Euro endured another flat week but signs could be looking more promising for bulls.
For a move higher we would like to see the Euro hold above 1.0500. Should this occur we could see a move into 1.0570. A break of this level could see this market rally further to 1.0645 and 1.0755.
If the EURO cannot hold above 1.0500, we will see a move into 1.0445. A strong break of this level may result in a move into 1.0355, however, any weakness below this level could see a sharp drop into parity at 1.0215.
GBP/USD – 1.2272 (+57 or +0.47%)
Boris Johnson remains under pressure with senior members of his Government resigning, though the GBP doesn’t seem to care either way.
For a move to the upside, we would like to see Cable hold above 1.2245 before a break higher into 1.2390. If this market can see a strong close above this level we may then see a strong push back into 1.2580. If upside momentum is really strong then a move back into 1.2665 can’t be ruled out.
Should we fail to hold above 1.2245, we will look for a move down to 1.2160. A break below this level however could see Cable further depreciate to 1.2075 by the week’s end and if momentum is very weak we cannot rule out a move to 1.1955.
USD/JPY – 135.20 (+26 or +0.19%)
A flat week for the Dollar Yen and false breakout of the 24-year highs – dollar reversal inbound?
VOLATILITY ALERTS:
Mon 22:30 – Core Durable Goods Orders M/m
Tues 00:00 – Pending Home Sales M/m
Tues 15:00 – BoJ Core CPI Y/y
Weds 00:00 – CB Consumer Confidence
Weds 23:30 – Fed Chair Powell speaks
For a move to the upside, we must now see this market hold above 134.55. Should this occur we will look for a move into 135.3, and if upside momentum is strong we could see a move higher into 137.2 and potentially 139.3.
If we cannot hold above 134.55, we could see a move back to test 133.72 before a pause to the downside. A break below this level may result in a sharp move lower into 132.35, and any further breaks to the downside may see a bigger move into 130.85.
COMMODITIES
GOLD – 1827 (-13 or -0.71%)
Gold edged lower ahead and bulls really need to find a base here if they don’t want to be back retesting yearly lows.
For a move higher we need to see this market close above 1830. Should this occur we could see a move into 1850, and any break of this level could see a stronger move into 1875. If momentum is strong then 1900 cannot be ruled out.
If Gold cannot close above 1830, we will look for a move back down to 1800. A break below this level could see a move lower into 1785, and if momentum is very strong to the downside we could see a move to 1750.
CRYPTOS
BITCOIN – 21163 (+3320 or +18.13%)
BTC bounced back as bulls held firm at the key 20k handle.
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 17560. If selling pressure takes control then we could see a move down to 14000. A close below this level and 12320 can’t be ruled out, maybe even a 10700 print.
