Market Brief

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Can last months off-the-scale NFP numbers be surpassed? Volatility in the crypto markets has been intense... Have we seen the last of the Bitcoin lows?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7001 ( -45 or -0.64%)

The ASX faced heavy resistance after filling the March 2020 gap and closed the week slightly down.

VOLATILITY ALERTS:

Tues 14:30 – RBA Interest Rate & Rate Statement

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 – 15146 (-133 or -0.87% )

The DAX traded back within its range after seeing several rejections off our overhead levels to end the week down.

VOLATILITY ALERTS:

Mon 16:00 – German Retail Sales M/m and Y/y

Mon 18:00 – EU Markit Manufacturing PMI

Thurs 19:00 – EU Retail Sales M/m

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 – 4193 (+14 or +0.34% )

Another relatively subdued week despite some impressive earnings of the big caps – as such our levels again remain unchanged.

VOLATILITY ALERTS:

Tues 00:00 – Ism Manufacturing PMI

Fri 22:30 – Non-Farm Payrolls and Unemployment Rate

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 – 0.7712 ( -36 or -0.46% )

Another choppy, indecisive week for the Aussie dollar which ended slightly down. Our levels remain unchanged.

VOLATILITY ALERTS:

Tues 14:30 – RBA Interest Rate & Rate Statement

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 – 1.2021 (-76 or -0.63% )

Upside momentum slowed down as the Euro ran into key resistance – is this the turning point for a move back down?

VOLATILITY ALERTS:

Mon 18:00 – EU Markit Manufacturing PMI

Thurs 19:00 – EU Retail Sales M/m

For a move higher we would like to see the EURO hold above 1.2000. Should this occur we could see a move into 1.2052. A break of this level could see this market rally further to 1.2113; and if momentum is very strong, 1.2170 cannot be ruled out.

If the EURO cannot close above 1.2000, we could see a move back down into 1.1925 before a pause. A strong break of this level may result in a move into 1.1833, however, any weakness below this level could see a sharp drop into 1.1738.

GBP/USD – 1.3814 ( -62 or -0.45%)

Cable erased all it’s weekly gains on Friday to close the week lower – big support areas below which we will be discussing in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Fri 21:00 – BoE Interest Rate Decision

For a move to the upside, we would like to see Cable close 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 – 109.33 ( +147 or +1.36% )

Consistent data beats in the U.S. showed up as the greenback found some strength in the later part of the week.  We will be discussing what all the data beats mean in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tues 00:00 – U.S. Ism Manufacturing PMI

Fri 22:30 – Non-Farm Payrolls and Unemployment Rate

For a move to the upside we must now see this market hold above 109.21. Should this occur we will look for a retest of 109.68, and if momentum is very strong we could see a move higher into 109.94 and potentially 110.38.

If we cannot hold above 109.21, we could see a move lower into 108.60 before a pause to the downside. A break below this level may result in a sharp move lower into 107.81, and any further breaks to the downside may see a bigger move into 106.97.

COMMODITIES

GOLD – 1768 ( -9 or -0.51% )

Gold once again had a quiet week but has managed to hold onto key support for a continuation of this move higher. Our levels remain unchanged.

VOLATILITY ALERTS:

Fri 22:30 – Non-Farm Payrolls and Unemployment Rate

For a continued move higher we need to 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 – 56200 ( +6380 or +12.81%)

Bitcoin bounced viciously following the recent sell-off – is a full fade in play or is it time to consider selling the rallies? 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 55415. Should this occur we could see a move into 56781 before retesting 60000. If upside momentum is really strong then we can’t rule out 65000.

Failure to hold at 55415 could see a move down to 53000. If selling pressure takes control then we could see another big test of support at 46192. A close below this level and 44098 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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