Market Brief

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Will a much improved NFP this week see them rip higher? Pres. Biden has revealed one of the largest budget proposals on record... What does it mean for 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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7015 ( +158 or +2.25% )

The ASX is now testing it’s all time high – is it ready to rip higher? We will be discussing this in our LIVE CHAT ROOM this week.

Mon 11:00 – ANZ Business Confidence

Tues 14:30 – RBA Interest Rate Decision and Statement

Weds 11:30 – GDP Q/q

Thurs 09:00 – Commonwealth Bank Composite PMI 

Thurs 11:30 – Retail Sales M/m

VOLATILITY ALERTS:

For a continued move higher we would like to see the ASX close above 7202. Should this occur, a move to the all-time highs at 7272 should be expected, and if momentum is very strong we cannot rule out moves to 7400. 

Failure to close above 7202 means a potential move back into 7091. The next support level down is 6969 if it doesn’t hold at 6850; if downside momentum is really strong then we could see a sharp move to 6804.

EUROPE

DAX – 15485 (+38 or +0.25%)

The DAX spent another week toying around with its ATH – with other Euro indices breaking their highs will the DAX follow suit?

VOLATILITY ALERTS:

Mon 22:00 – CPI M/m and Y/y

Tues 14:00 – Retail Sales M/m

Tues 19:55 – Unemployment Rate and Markit Manufacturing PMI

Thurs 18:00 – EU Markit Services and Composite PMI 

Fri 19:00 – EU Retail Sales M/m

For the DAX to continue its move higher we first want to see it hold above 15345. Should this occur then 15500 is the next technical level ahead, and 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 – 4205 (+45 or +1.08% )

The S&P faded the mid-month sell-off to end the week and month marginally higher – the bulls are still around. We will be discussing what is next in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Weds 00:00 – ISM Manufacturing PMI

Fri 00:00 – ISM Non-Manufacturing PMI

Fri 22:30 – Non Farm Payrolls

For a move higher we would like to see the S&P hold above 4200. Should this occur, we will look for a move to 4252; and if momentum is very strong we cannot rule out moves to 4300 and 4435.

If we cannot hold 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 – 0.7730(-22 or -0.28%)

A third week in the red for the Aussie Dollar as commodities prices fell – is a bigger move down starting? We will discuss this further inside our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Mon 11:00 – ANZ Business Confidence

Tues 14:30 – RBA Interest Rate Decision and Statement

Weds 11:30 – GDP Q/q

Thurs 09:00 – Commonwealth Bank Composite PMI 

Thurs 11:30 – Retail Sales M/m

For a move higher this week, we would like to see it close above 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 close above 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 – 1.2192 (+13 or +0.11%)

The Euro endured a relatively choppy week to close out flat – as such our levels remain unchanged.

VOLATILITY ALERTS:

Thurs 18:00 – EU Markit Services and Composite PMI 

Fri 19:00 – EU Retail Sales M/m

For a move higher we would like to see the EURO hold above 1.2170. Should this occur we could see a move into 1.2222. A break of this level could see this market rally further to 1.2353; and if momentum is very strong, 1.2483 cannot be ruled out.

If the EURO cannot close above 1.2170, we could see a move back down into 1.2113 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 – 1.4189 (+41 or +0.29%)

Like the Euro, the Cable also endured a choppy week to close marginally higher – which direction will the breakout of consolidation occur? We will be discussing this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

For a move to the upside, we would like to see Cable hold above 1.4125, before a break higher through 1.4250. If this market can see a strong close above this level we may then see a strong push into 1.4375.

Should we fail to hold above 1.4125, we will look for a move down to 1.4000. A break below this level however could see Cable further depreciate to 1.3865 by the week’s end and if momentum is very weak we cannot rule out a move to 1.3755.

USD/JPY – 109.85 (+89 or +0.82%)

The Dollar Yen had a strong end to the week although we are watching for a fade following Friday’s reversal. We will be discussing this further in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Weds 00:00 – ISM Manufacturing PMI

Fri 00:00 – ISM Non-Manufacturing PMI

Fri 22:30 – Non Farm Payrolls

For a move to the upside we must now see this market hold above 109.68. Should this occur we will look for a retest of 109.94, and if momentum is very strong we could see a move higher into 110.38 and potentially 111.

If we cannot hold above 109.68, we could see a move back to test 109.21 before a pause to the downside. A break below this level may result in a sharp move lower into 108.60, and any further breaks to the downside may see a bigger move into 107.81.

COMMODITIES

GOLD – 1904 (+23 or +1.22%)

Gold continues to post weekly gains and higher lows in this trend higher. We will continue to discuss this throughout the week in our LIVE CHAT ROOM.

VOLATILITY ALERTS:

Weds 00:00 – ISM Manufacturing PMI

Fri 00:00 – ISM Non-Manufacturing PMI

Fri 22:30 – Non Farm Payrolls

For a continued move higher we need to see this market hold above 1905. Should this occur we will move into 1930; and any break of this level could see a stronger move into 1960. If momentum is really strong then 1975 cannot be ruled out.

If Gold cannot hold above 1905, we will look for a move back down to 1875. A break below this level could see a move lower into 1850; and if momentum is very strong to the downside we could see a move to 1814.

CRYPTOS

BITCOIN – 36145 ( +983 or +2.8% )

A choppy week for Bitcoin between support and resistance – which side is going to give way first?  We will be discussing this in our LIVE CHAT ROOM this week.

For a move higher we must now see this market hold above 35000. Should this occur we could see a move into 40000 before retesting 42000. If upside momentum is really strong then we can’t rule out 50000.

Failure to hold at 35000 could see a move down to the lows around 30000. If selling pressure takes control then we could see a move down to 25700. A close below this level and 19000 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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