Market Brief

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Are US markets looking a little shaky..? Heading into an important week, Can Powell stabilise the growth sector in the US?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6685 ( -79 or -1.17% )

The ASX remains in its sideways range yet again and we are watching this market very closely now. We will be discussing this in our LIVE CHAT ROOM this week.

For a continued move higher we must now see the ASX hold above 6682. Should this occur, we will look for a move into 6804, and if momentum to the upside is very strong we cannot rule out a move to 6850 and 6960.

If the ASX cannot hold above 6682, we will look for a move back down to 6550. A strong break and close below this level however could see the ASX retest of 6500, and if downside momentum is very strong, we could see a move down to 6435.

EUROPE

DAX – 14620 ( +59 or +0.41% )

The DAX was once again the star performer last week posting all-time highs. Can it break through and test 15,000 this week?

VOLATILITY ALERTS:

Wed 19:30 – German Flash Manufacturing PMI, Services PMI
Thu 02:40 – ECB President Lagarde Speaks
Thu 20:30 – ECB President Lagarde Speaks
Fri 20:00 – German Ifo Business Climate
Fri ALL DAY – Euro Summit

For a continued move to the upside we must now see the DAX hold above 14596. Should this occur, we will look for a strong move back up into 14650, and if momentum remains strong a push back higher into 14790 and 14990.

If the DAX fails to hold above 14596, we may see a retest back down into the key level of 14303. A close below this level is likely to see a retest of 14210; however if momentum is very strong to the downside we cannot rule out a move to 14120.

US

SP500 – 3907 ( -36 or -0.91% )

The S&P continues its important test just below the 4000 area. We will be discussing this again in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tue 00:00 – FED Chair Powell Speaks
Wed 01:00 – FED Chair Powell Testifies
Thu 00:45 – Flash Manufacturing PMI
Thu 01:00 – FED Chair Powell Testifies
Thu 23:30 – Final GDP (quarterly)

For a move higher we would like to see the S&P close above 3950. Should this occur, we will look for a move to 4000; and if momentum is very strong we cannot rule out moves back up to 4022 and 4050.

If we cannot close above 3950, we could see this market move lower into 3894. A break of this level however may result in a quick move down to 3802; and if momentum to the downside remains strong we may see a fast move down to 3720.

FOREX

AUD/USD – 0.7742 ( -15 or -0.19% )

The Aussie dollar remained sideways last week and so our levels remain unchanged.

For a move higher, we would first like to see the AUD hold above 0.7729. Should this occur we will look for a move into 0.7823, and if upside momentum remains very strong we cannot rule out a move to 0.7997 before a pause.

If the AUD cannot hold above 0.7729, we will look for this market to break lower through 0.7662. A break and close below this level could see a sharp decline into 0.7550, and if momentum to the downside remains strong we cannot rule out a move into 0.7489.

EUR/USD – 1.1906 ( -45 or -0.38% )

The Euro was slightly lower as we head into another important week.

VOLATILITY ALERTS:

Thu 02:40 – ECB President Lagarde Speaks
Thu 20:30 – ECB President Lagarde Speaks
Fri ALL DAY – Euro Summit

For a move higher we would like to see the EURO close above 1.1925. Should this occur we could see a retest of 1.2000. A break of this level could see this market rally further to 1.12042; and if momentum is very strong, 1.2112 cannot be ruled out.

If the EURO cannot close above 1.1925, we could see a fast move down into 11834 before a pause. A strong break of this level may result in a move into 1.1738, however, any weakness below this level could see a sharp drop into 1.1678.

GBP/USD – 1.3864 ( -54 or -0.39% )

Cable was also slightly weaker last week despite holding onto important support levels.

VOLATILITY ALERTS:

Tue 20:50 – BoE Governor Bailey Speaks
Wed 18:00 – CPI (annual)
Wed 20:30 – Flash Manufacturing PMI, Services PMI
Thu 20:30 – BoE Governor Bailey Speaks
Fri 18:00 – Retail Sales (monthly)

For a move to the upside now, we would like to see Cable close above 1.3875, before a break higher through 1.4041. If this market can hold above this level we may then see a strong push into 1.4120 before another pause. A break through this level sets Cable up for a move up to 1.4250.

Should we fail to close above 1.3875, we will look for a move down to 1.3743. A break below this level however could see Cable further depreciate to 1.3534 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3410.

USD/JPY – 108.88 ( -15 or -0.14% )

The $/YEN was also flat having spent the majority of the week at a very big level. We will be discussing what this means in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Thu 12:30 – BoJ Governor Kuroda Speaks

For a move to the upside we must now see this market hold above 108.31. Should this occur we will look for a retest of 109.21, and if momentum is very strong we could see a move higher into 109.94 and potentially 111.73.

If we cannot hold above 108.31, we could see a move lower into 106.52 before a pause to the downside. A break below this level may result in a sharp move lower into 105.50; and any further breaks to the downside may see a bigger move into 104.97.

COMMODITIES

GOLD – 1745 ( +17 or +0.98%)

Gold has bounced but is it enough for a bottom to be in place? We will discuss this market in detail in the LIVE CHAT ROOM this week.

For a continued move higher we must now see this market hold above 1700. Should this occur we could see a retest of 1755, and any break of this level could see a stronger move into 1786.

If Gold cannot hold above 1700, we will look for a move back down to 1687. A break below this level could see a move lower into 1674, and if momentum is very strong to the downside we could see a move to 1648.

Additional analysis including charts available in our platform

Commentary from our trading desk – written by our Head of Trading.

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