Market Brief

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Will central banks provide any surprises? Biden’s tax hike proposals caused a wobble across markets...Will markets brush it off or is there a deeper message here?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7046 ( -40 or -0.56%)

The ASX printed a weekly pin bar after the midweek sell-off – can it take out the highs this week to run at the all-time high? We will be discussing this in our LIVE CHAT ROOM this week.

For a continued move higher we would like to see the ASX close above 7091. Should this occur, a move to the all time highs at 7202 should be expected; and if momentum is very strong we cannot rule out moves to 7272. 

Failure to close above 7091 means a potential move back into 6969. 6850 is the next support level down if 6969 doesn’t hold. If downside momentum is really strong then we could see a sharp move to 6804.

EUROPE

DAX – 15279 (-228 or -1.47% )

The DAX erased all the previous week’s gains but did bounce at key support – we will be discussing the race to replace Merkel in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Mon 18:30 – IFO Business Climate

Thurs 17:55 – Unemployment Rate and Change

Thurs 22:00 – CPI M/m and Y/y

Fri 16:00 – GDP Q/q and Y/y

Fri 19:00 – EU GDP Q/q and Unemployment Rate

For the DAX to continue its move higher we first want to see it close above 15345. Should this occur then 15583 is the next technical level ahead. If upside momentum really takes hold then 15782 cannot be ruled out. 

To the downside, should we see a rejection from 15345, we will look for a move into support at 15050. A strong break and close below this handle and 14990 is the next leg down. If downside pressure mounts then 14790 cannot be ruled out.

US

S&P 500 – 4179(-6 or -0.14% )

Despite some midweek selling the S&P found key support and closed relatively flat – as such our levels remain unchanged.

VOLATILITY ALERTS:

Mon 22:30 – Core Durable Goods M/m

Weds 00:00 – Cb Consumer Confidence Index

Thurs 04:00 – Fed Interest Rate Decision

Thurs 04:30 – FOMC Press Conference

Thurs 22:30 – GDP Q/q 

Fri 00:00 – Pending Home Sales M/m

For a move higher we would like to see the S&P close above 4200. Should this occur, we will look for a move to 4251; and if momentum is very strong we cannot rule out moves back up to 4435.

If we cannot close above 4200, we could see this market move back down into 4155. A break of this level however may result in a quick move down to 4117, and if momentum to the downside remains strong we may see a fast move back down to 4050.

FOREX

AUD/USD – 0.7748 ( +13 or +0.07% )

Quite a choppy, indecisive week for the Aussie dollar which ended relatively flat. Our levels remain unchanged. 

For a move higher this week we would like to see it hold at 0.7729. We will then be targeting a move back into 0.7823. If we see a strong break and close above this level then we can’t rule out a move to 0.7997.

If this market cannot hold 0.7729, we could see a move back down into 0.7660 before a pause. A strong break of this level may result in a move into 0.7562, however, any weakness below this level could see a sharp drop into 0.7500.

EUR/USD – 1.2097 ( +116 or +0.97% )

Upside momentum is in full swing for the Euro right now, despite a relatively muted ECB Conference midweek.

VOLATILITY ALERTS:

Fri 19:00 – EU GDP Q/q and Unemployment Rate

For a move higher we would like to see the EURO close  above 1.2113. Should this occur we could see a move into 1.2170. A break of this level could see this market rally further to 1.2222; and if momentum is very strong, 1.2349 cannot be ruled out.

If the EURO cannot close above 1.2113, we could see a move back down into 1.2052 before a pause. A strong break of this level may result in a move into 1.2000, however, any weakness below this level could see a sharp drop into 1.1925.

GBP/USD – 1.3876 ( +36 or +0.26%)

Cable closed slightly higher despite a big reversal off overhead resistance.

For a move to the upside, we would like to see Cable hold above 1.3865, before a break higher through 1.4000. If this market can hold above this level we may then see a strong push into 1.4250.

Should we fail to hold above 1.3865, we will look for a move down to 1.3755. A break below this level however could see Cable further depreciate to 1.3666 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3620.

USD/JPY – 107.86 ( -94 or -0.86% )

A full week of selling for the $/Yen with the downtrend showing no signs of slowing down.  We will be discussing what this means in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tues 12:30 – BoJ Interest Rate

Tues 16:3 Boj Press Conference

Weds 09:50 – Japan Retail Sales M/m

Thurs 04:00 – Fed Interest Rate Decision

Thurs 04:30 – FOMC Press Conference

Fri 09:30 – Japan Unemployment Rate

Friday 09:50 – Japan Industrial Production M/m

For a move to the upside we must now see this market hold above 107.81. Should this occur we will look for a retest of 108.60, and if momentum is very strong we could see a move higher into 109.21 and potentially 109.68.

If we cannot hold above 107.81, we could see a move lower into 107.00 before a pause to the downside. A break below this level may result in a sharp move lower into 106.10, and any further breaks to the downside may see a bigger move into 105.00.

COMMODITIES

GOLD – 1777 ( +1 or +0.06% )

Gold ended the week completely flat with a weekly doji bar printed – our levels remain unchanged.

VOLATILITY ALERTS:

Thurs 04:00 – Fed Interest Rate Decision

Thurs 04:30 – FOMC Press Conference

For a continued move higher we must now see this market hold above 1765. Should this occur we could see a move into 1786; and any break of this level could see a stronger move into 1800. If momentum is really strong then 1814 cannot be ruled out.

If Gold cannot hold above 1765, we will look for a move back down to 1750. A break below this level could see a move lower into 1700; and if momentum is very strong to the downside we could see a move to 1687.

CRYPTOS

BITCOIN – 49820 ( -4802 or -8.05% )

Bitcoin saw a key support break with selling pressure intensifying and is now >25% off its highs. We will be discussing what this means in our LIVE CHAT ROOM this week.

For a move higher we must now see this market hold above 50000. Should this occur we could see a move into 53000 before retesting 55415. If upside momentum is really strong then we can’t rule out 58000.

Failure to hold at 50000 could see a move down to 46192. If selling pressure takes control then we could see another big test of support at 44086. A close below this level and 38729 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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