Market Brief

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Markets remain volatile...With this volatility will we see the US post all time highs again, or will these markets sell-off?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6871 ( +186 or +2.78% )

VOLATILITY ALERTS:

Tues 11:30 am – Retail Sales m/m

The ASX spent another week without breaking out of its range, however, five green days in a row gave reason to watch closely for that break.

For a continued move higher we would like to see the ASX hold 6850. Should this occur, a break to 6960 could be in play. With clear skies ahead a move to finally fill last March’s gap at 7090 can’t be ruled out. 

Failure to hold 6850 means a potential full fade of Friday’s strong day back into 6804. A strong break and close below this level and 6650 comes back into play for support. If downside momentum is really strong then we could see a sharp move to 6550.

EUROPE

DAX – 14849 ( +229 or +1.57% )

VOLATILITY ALERTS:

Thurs 1st 17:00 – German Retail Sales m/m

The DAX managed to close the week at all time highs – can we see a move through 15000 this week? 

For the DAX to reach 15000 we first want to see it hold 14790. A break through 15000 and 15048 is the next technical level ahead. If upside momentum really takes hold then 15389 cannot be ruled out. 

To the downside, should 14790 not hold, we will look for a move into support at 14596. A strong break and close below this handle and 14303 is the next leg down. If downside pressure mounts then 14210 cannot be ruled out. 

US

SP500 – 3975 ( +68 or +1.74% )

VOLATILITY ALERTS:

Thurs 1st 2:00 AM – Pending Home Sales
Sat 3rd 11:30 PM – Non-Farm Employment Change
Sat 3rd 11:30 PM – Unemployment Rate

A strong end to the week meant the S&P held up in it’s long term trend despite selling pressure throughout the week – 4000 is in sight. 

For a move into 4000 we would like to see 3950 hold, after getting the close above this level on Friday. 4022 is the next move higher should we get a close above 4000 and if bullish momentum is strong we will look for a move into 4050. 

Failure to hold 3950 and 3894 will come back into play. Another big test of the year-long trend line could play out around that handle and closing below could see a sharp move down into 3802. 3720 can’t be ruled out if downside momentum is really strong. 

FOREX

AUD/USD – 0.7643 ( -99 or -1.28% )

VOLATILITY ALERTS:

Tues 11:30 am – Retail Sales m/m

The Aussie Dollar closed weaker although a double bottom may have formed on Friday… 

For a move higher this week we would like to see a close above 0.7660. A full fade of Tuesday’s selling could then be in play with a move back into 0.7729. Overhead, 0.7823 is the next area we could see a move into with an extreme move to 0.7997 not being ruled out if upside momentum is strong. 

A retest of the double bottom level of 0.7562 also can’t be ruled out, with a break and close below this handle signifying a potential sell off into 0.7500. A continued move lower into 0.7423 is in play if we close below the 75c level. 

EUR/USD – 1.1793 ( -113 or -0.95% )

The Euro looked a bit heavy last week and collapsed following a close below 1.1833 – will the bulls step in around some key technical levels? 

For a bounce higher following last week’s sell off we would first like to see 1.1756 hold. If we see this level hold then 1.1833 can be targeted. A strong break and close above 1.1833 and we would look for a move into 1.1914.

If the sellers stay in control this week and we see a close below 1.1756 then a continued move down into 1.1696 is likely. Should downside momentum be really strong then 1.1612 is the next support for this market. 

GBP/USD – 1.3791 ( -73 or -0.53% )

VOLATILITY ALERTS:

Cable was slightly weaker last week despite a nice midweek bounce following a strong USD rally.

A full fade of last week’s sell off is in play if we hold 1.3755 before moving back up to 1.3865. A strong close above 1.3865 and 1.4000 can’t be ruled out. 

Failure to hold 1.3755 this week means a likely retest of last week’s lows around 1.3660. A close below these lows and 1.3620 is the next downside support handle.  

USD/JPY – 109.69 ( +81 or +0.74% )

VOLATILITY ALERTS:

Thurs 1st 2:00 AM – Pending Home Sales
Sat 3rd 12:30 AM – Non-Farm Employment Change
Sat 3rd 12:30 AM – Unemployment Rate

A strong rally on Friday saw the Dollar Yen break through resistance – is a pullback due at some key technical levels this week?

For this move to sustain itself then we would like to see it hold 109.68 for a move into 109.94. Should bullish momentum continue throughout the week and we see a strong close above 109.94, a move to 111.73 shouldn’t be ruled out.

We will be watching for a fade of Friday’s strong day should this market fail to hold at 109.68. A move back down into 109.21 could then occur with 108.31 the next support level below there. If downside momentum is really strong then we can’t rule out a big move into 107.81 this week.

COMMODITIES

GOLD – 1733 ( -12 or -0.69% )

A very flat week for GOLD as it battles to break out of its downtrend… our levels remain unchanged.

For a move higher we need to see GOLD break and close about 1755. We will then be targeting a move into 1786 should this occur. 

To the downside 1700 is still the key support level for this market. A break and close below 1700 and 1687 come into play. The lows below there around 1674 should be respected if 1687 doesn’t hold. 

CRYPTOS

BITCOIN – 55833 ( -1974 or -3.41% )

Last week saw Bitcoin move lower as the volatility continued – is there more to this correction this week?

For a move back into 60000 we must first see a close above 55000. 57280 is another upside level to get through at previous highs and strong upside momentum can see 60000 back in play. 

Failure to hold above 53100 could see the correction continue and a take out of last week’s low around 50300. A strong close below this handle and a sharp move down to 47175 sees a previous downside range met. 44000 can’t be ruled out if downside pressure is strong.

Additional analysis including charts available in our platform

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

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