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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 6855  ( -15 or -0.22%)

Another choppy week for the ASX which ended relatively flat… our levels remain unchanged.

VOLATILITY ALERTS:

Tues 14:30 – RBA Cash Rate 

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 move back into 6804 and close below this level means 6682 comes back into play for support. If downside momentum is really strong then we could see a sharp move to 6550.

EUROPE

DAX – 15180 ( +365 or +2.46% )

The DAX ripped higher last week and straight through 15000 – this market is now testing a long term trend line, is a breather due this week?

For the DAX to continue its move higher we first want to see it hold 15048. A break through 15345 and 15585 is the next technical level ahead. If upside momentum really takes hold then 15782 cannot be ruled out. 

To the downside, should 15048 not hold, we will look for a move into support at 14990. A strong break and close below this handle and 14790 is the next leg down. If downside pressure mounts then 14578 cannot be ruled out.

US

SP500 – 4039 ( +46 or +1.14% )

Another strong end to the week saw the S&P finally close above the 4000 handle – eyes will once again be on Fed chair Powell’s speech on Thursday.

VOLATILITY ALERTS:

Tuesday 6th 00:00 – ISM Services PMI

Thursday 8th 3:00 – FOMC Meeting Minutes

Friday 9th 2:00 – Fed Chair Powell Speaks

For a continued move higher we would like to see 4022 hold, after getting the close above this level on Friday. 4050 is the next level for this market to get above and if it does then we will look for a move to 4117.

Failure to hold 4022 and 4000 will come back into play. If they can’t hold the 4000 handle then 3950 becomes the next leg down. 3902 can’t be ruled out if downside momentum is really strong. 

FOREX

AUD/USD – 0.7608 ( -36 or -0.47% )

The Aussie Dollar closed slightly weaker again although the bulls managed to hold a key technical level despite selling pressure.

VOLATILITY ALERTS:

Tuesday 6th 14:30 – RBA Cash Rate

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 – 1.1760 ( -32 or -1.79% )

The Euro continues to trend lower despite finding a bounce off key channel support.

For a move higher 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 – 1.3829 ( +39 or +0.28% )

Cable closed slightly higher for the week despite a lot of sideways price action.

For a move higher this week, we would like to see this market hold 1.3755 before closing above 1.3865. A strong close above 1.3865 and 1.4000 can’t be ruled out. If momentum to the upside is really strong then a retest of the yearly highs of 1.4241 could be in play.

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

USD/JPY – 110.66 ( +99 or +0.9% )

The Dollar Yen continued its upward trajectory – can anything slow this market down? We will be discussing what this means in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tuesday 6th 00:00 – ISM Services PMI

Thursday 8th 3:00 – FOMC Meeting Minutes

Friday 9th 2:00 – Fed Chair Powell Speaks

For this move to sustain itself then we would like to see it hold 110.38 for a move into 111.26. Should bullish momentum continue throughout the week and we see a strong close above 111.26, a move to 111.73 shouldn’t be ruled out.

Should this market fail to hold at 110.38 a move back down into 109.94 could then occur with 109.68 the next support level below there. If downside momentum is really strong then we can’t rule out a big move into 109.21 this week.

COMMODITIES

GOLD – 1730 ( -2 or -0.12% )

Another flat week overall for GOLD despite some intraday volatility midweek as key technical levels were able to hold, has a bottom formed?… 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 comes into play. The lows below there around 1674 should be respected if 1687 doesn’t hold. 

CRYPTOS

BITCOIN ( +4716 or +8.74% )

Bitcoin posted another impressive gain for this week as it sets up another run at 60000.

For a move into all time highs we must first see a close above 60000. Should we get this then our next upside targets are 62500 and 67115.

Failure to get that close above 60000 again could see a move back down into 57290. A close below this level and 49519 can’t be ruled out.

Additional analysis including charts available in our platform

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

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