Market Brief

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Will the ECB spring any surprises on the market? Last month's U.S. inflation print spooked the markets... Will we see another higher than expected number and what does that mean?

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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 – 7294 ( +121 or +1.69% )

We finally got that break and close above all time highs and now this market looks like it wants to rip higher. We will be discussing this in our LIVE CHAT ROOM this week.

For a continued move higher we would like to see the ASX hold above 7272. Should this occur, a move to the all-time highs at 7400 should be expected; and if momentum is very strong we cannot rule out moves to 7500. 

Failure to close above 7272 means a potential move back into 7202. 7091 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 6850.

EUROPE

DAX – 15485 (+198 or +1.28%)

The DAX joined the party at all-time highs and could rip higher from here – we will be watching a busy week on the calendar closely for this market.

VOLATILITY ALERTS:

Mon 16:00 – Factory Orders M/m & Y/y

Tues 16:00 – Industrial Product M/m & Y/y

Tues 19:00 – EU Employment Change and GDP Q/q

Tues 19:05 – ZEW Economic Settlement Indicator

Weds 16:00 – Trade Balance

Thurs 21:45 – ECB Interest Rate Decision & Deposit Rate Facility Decision

Thurs 22:30 – ECB Monetary Policy Press Conference

For the DAX to continue its move higher we would like to see it hold above 15500. Should this occur then 15782 is the next technical level ahead. If upside momentum really takes hold then 16000 cannot be ruled out. 

To the downside, should 15500 not be able to hold, we will look for a move into support at 15500. A strong break and close below this handle and 15050 is the next level down. If downside pressure mounts then 14990 cannot be ruled out.

US

S&P 500 – 4229 (+24 or +0.57%)

The S&P posted a marginal gain for the week thanks to Friday’s NFP move – will we see new highs this week? We will be discussing what is next in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tues 22:30 – Trade Balance

Weds 00:00 – Jolts Jobs Openings

Thurs 22:30- Core CPI M/m & Y/y

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 – 0.7741(+33 or +0.43%)

A fade of the previous week’s loss as the Aussie dollar continues to lack direction. Our levels also continue to remain unchanged. We will discuss this further inside our LIVE CHAT ROOM this week.

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 – 1.2169 (-23 or -0.19%)

The Euro endured another sideways week to close out flat – as such our levels remain unchanged.

VOLATILITY ALERTS:

Tues 19:00 – EU Employment Change and GDP Q/q

Thurs 21:45 – ECB Interest Rate Decision & Deposit Rate Facility Decision

Thurs 22:30 – ECB Monetary Policy Press Conference

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 – 1.4156 (-33 or -0.23%)

The Cable spent another week sideways and appears to be running out of steam. Are we starting to see signs of a move lower? We will be discussing this in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tues 19:00 – EU Employment Change and GDP Q/q

Fri – 16:00 – GDP M/m & Q/q

Fri 16:00 – Manufacturing Production 

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 (-33 or -0.3%)

FX continues to range and the $ Yen doesn’t escape it – a flat week despite sizable intraday moves later in the week. We will be discussing this further in our LIVE CHAT ROOM this week.

VOLATILITY ALERTS:

Tues 21:30 – Japan GDP 

Tues 22:30 – U.S. Trade Balance

Weds 00:00 – U.S. Jolts Jobs Openings

Thurs 22:30- U.S. Core CPI M/m & Y/y

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 – 1891 (-13 or -0.68%)

GOLD managed to close the week relatively flat despite a large decline on Thursday. We will discuss this throughout the week in our LIVE CHAT ROOM.

VOLATILITY ALERTS:

Thurs 22:30- U.S. Core CPI M/m & Y/y

For a continued move higher we need to see this market close 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 close 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 – 36194 (+49 or +0.14%)

Another consolidating week for Bitcoin as the triangular pattern nears the end – will we see a big breakout this week?  We will be monitoring this closely and discussing it 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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