 Good morning and welcome to the weekly market update with me David Madden Today's date is Monday the 12th of October 2020 and the time has just gone 9.59 British summer time and it's been a fairly quiet week start to the do the trading week slightly optimistic mood In Europe. We had a pretty decent finish to Friday in terms of US equities and European equities there seems to be some hope and optimism in relation to The possibility of the US politicians agreeing on a coronavirus Relief package although no great details have been have been announced at the back end of last week on Friday President Trump tweeted out saying that That the talks are progressing, you know, as always the US leader is a bit light on detail We've heard that the Republicans increased their Proposal from a stimulus package of 1.6 trillion to 1.8 trillion dollars Keep in mind the Democrats are pushing for a package or a scheme worth 2.2 trillion So there's still quite a long way to go But nonetheless the fact that the Republicans up there up their offer Is a step in the right direction nonetheless? So that obviously had a positive finish positive Influence on US markets at the back on Friday We're seeing a bit of that spill over to Europe today to be honest. It's a bit quiet the health situation is still kind of a crisis and Concerns about restrictions is still bobbing away in the background But also this week is going to be big is potentially going to be a big week in relation to UK EU talks Which I mentioned in the week ahead in the week ahead Article essentially a few weeks ago Prime Minister Boris Johnson of the UK stated that if a meaningful meaningful trade deal or anything deal hasn't been mapped out By the 15th of October the British negotiating team will walk away from discussions So this could be a very big week for UK EU talks, you know Both sides have talked about how progress has been made but both sides have also said that they want to have the right deal and Differences remain so it's got as potential to be a big week for the UK EU trade talks What I'll do is now I have a quick look at the week ahead article and then run through some of the big markets So starting off with the week ahead article, which can be found on a website if you go to cmcmarkets.com under insights under latest news and analysis Tomorrow we have the we have the beginning of the Reporting season for US banks. So all the kind of big players are gonna be reporting the next few days JP Morgan city group Bank of America Wells Fargo Morgan Stanley They're gonna be in focus How their trading desk performed is going to be something something that dealers are going to be looking out for a lot of volatility in the Financial markets in the last few months because of the hell crisis has has been a has been a has seen in Many cases boosted trading revenue at the bank at the big banks But also we've seen a fairly large increase in the number of bad debt provisions because of the the pandemic On Tuesday, we have China trade figures out that gives indication of both internal demand and external demand obviously imports being internal demand exports being external demand but keep in mind China sells manufacturers and sells a lot of personal protective equipment PPE To the to the rest of the world. So if we have strong Chinese exports That could be because it is a high level of PPE thrown into the mix Johnson and Johnson have third quarter results out one of one of their There in running for a potential COVID-19 vaccines any relation any updates in relation to that will be in focus We all have a special event from Apple during the week. Just talk of an iPhone 12 being announced Delta Airlines have their third quarter numbers coming out on Tuesday The US airline section has been has been focused the last the last few sessions. President Trump was called for another 25 billion dollar Relief package or bailout package for the trouble for the troubled sector. So any updates In relation to their funding is going to be in focus On Tuesday, we also have uk unemployment numbers This and this is going to be claim account probably is probably going to be the most important to watch out for within the overall set of numbers Because they're the most recent figures We have us CPI and us retails and you to us retail sales this week They'll give us a good indication of actually consumer demand basically particularly the retail sales We've seen from more recent job reports at the unemployment rate in the US is coming down Non-fan payroll figures shows that more jobs have been you know jobs that are being created But our us our us workers actually going out and spending money That's going to be the real question. Fedders are going to be asking On Wednesday ASOS have filled your numbers out The online fashion crowd have performed very well in terms of share price action in the last few months We've had a couple of bullish updates from the company and the last few months Which has just propelled the share price higher and higher Boots, sorry wall greens boots alliance. They have forward quarter numbers coming out on Thursday As I mentioned in relation to uk-eu trade talks Thursday the 15th could be the Could be a crucial date for uk-eu trade talks and finally as we do every single Thursday us jobless claims Starting off with the major indices I'll be looking at the foots 200 first of all So the footsy achieved a multi-month high in June and its highest level in June Since since uh since early march, but ever since that we've already been being pushing lower But more recently we found decent support Seems to have found decent support level in around here in around 5,800 down to 5,767 We've been pushing higher since in fact on friday. We hit a three week high We're currently just about Above the important psychological 6,000 mark So if you can hold above that metric it's likely we could see further gains be made from here If you do press on higher from here, we could be looking at targeting the one really moving average Which is this the other line here at 6,096 If you go beyond that we could then be looking at targeting the mid september high in around 6,126 And if you go beyond that we could then be looking at targeting the highs of late august In around 6,175 Um, and he moves to the downside, you know, if you do have a decent break below The early october low in around 5,972 we could head it back down towards 5,800 Let's take a look what's going on over in germany So the germ market has been in better shape than the footsy 100 It was only a few weeks ago at the beginning of september It hit a multi-month high the highest level since early since basically the crisis Was really kicking off in mid to late february We had the lower low, but since then we have been pressing higher And if we look at this notice how we're back above this blue line here the 50 moving average Which acted both as support Along here and resistance along here So it seems to me this is a fairly important metric If you continue to hold above this blue line here the 50 moving average 12,934 It's likely we could see the wider Um, the wider upward trend continue, which is also the more recent trend of the last few weeks So if you press on higher from here, we could be looking at retesting the mid september high in around 13,339 And if you go beyond that we could be looking at targeting the the highs of early september, which as I said Was the was this was the highs the highest seen in about seven months If we do see a pullback and if you do have a decent break below the fifth and moving average That could take us back down towards this yellow line here the water to move the average We can see that well the market did trade below it In early october, but when even when it traded below it, it's the manager close can't be above it So that area Could act as support again and that comes to play just north of 12,700 That's only really if you take out the lows of late september this level here in at 12,339 Could then we could then we begin to get worried I think that we're heading back down towards this red line the trinity moving average in at 12,158 Notice how the trinity moving average active nice the support in late july So if the metric has acted as support in the past it makes it more likely it'll be of importance in the future Although there are no guarantees Starting off with the foot looking take a look now with the with the the dow Jones over in the u.s So the dow Jones racked up an all-time high in september In early september So the u.s markets are in better shape in the european counterparts But then of course, you know, like other markets that we it endured a fairly decent sell-off Or by we the lower low the lower high and the lower low But in the last few weeks, we've been pressing higher yet again Only on friday we achieved the highest level Since early september it's about a five week high that was that was registered on friday We're pushing on low or higher here We're comfortably above this blue line the 50 moving average And while we remain above that metric it's likely that we could see further gains being made from here So we're to be asked for a million miles away from the old-time high that was achieved Um in early september So if you press on there from here, we could be looking at tackling 29 000 and if you go beyond that We'll be heading up towards the old-time high that was achieved and those comes into play around 20 at 9 Well just just south of 20 at 9 200 Most of the downside could find some support from 28 000 No big psychological number and then that's not too far away from this blue line here The 50 moving average in a 20 27 800 and 84 Sticking with the u.s. Let's look at look at the s&p 500 Similar situation an old-time high was achieved in early september. We've added the lower low the lower high the lower low But in the last few weeks We've been pressing higher and in fact the the highs that were going that we were um On track to achieve today. We're currently expecting the s&p 500 to open around 3492 once cash trading gets underway That'll be, you know, the highest level seen since the third of september So we're talking like, you know, five week highs if we continue to press on higher from here We could be looking at targeting 3500 and a move beyond that could take us back up towards the all-time highs that were achieved At the beginning of september If we do see a pullback in the s&p 500, we could see support coming to play in this zone here Um in around 3400 Notice how well this but from 3414 up to around Um, just say 3400 south isn't this entire zone here could act as support We could notice on a few occasions um The area broadly speaking in around 3400 Actually a resistance on the way up and then if you take a look at the highs achieved on the um On the 30 and this on the sixth on the sixth of october that was a 3431 the lows on on the eighth were 3400 415 there thereabouts So that entire zone there could act as a support sure we have a move to the downside And it's only really if you have a decent break below this area here um Which comes into play in at 3341 uh that the lows of Early october could then we begin to think you know if we are heading south and then we heading back potentially down towards 3300 Take a look at what's going on on the currency market starting off with euro dollar So the broad trend of our last few months has been very much to the upside In fact in early september euro dollar hit its highest level in over two years But whenever you know whenever whenever we have a significant move in one direction It's not it's not unusual to see a move in the opposite direction Which is precisely what we saw we had a bit of a correction in euro dollar The uh was largely driven by an upward move in the dollar But since then we are see we have seen a bit of a correction in that so it seems that in the last few The last week couple of weeks we have seen uh continuation of the broader upward trend in in um Euro dollar with as of uh on friday we closed above the fifth day moving average For the first time in quite some while this blue line here is the fifth moving average That comes into play just north of one spot 18 If we can continue to hold above that metric It's like at the kind of more recent upward trend and which ties into the broader upward trend Is going to continue so if you press on higher from here We could be looking at heading up towards the early september highs in around one spot 1917 and if you go beyond that you could be looking at heading up towards the uh the one spot 20 zone Any moves to the downside could find some support in around here in a one spot 16 84 And if you go below that we can go ahead back down towards the kind of the low one 16s in around kind of one 16 12 16 13 And if you do have a decent break below that that could take us back down toward this zone here down around one spot 14 sticking With the currency markets, let's take a look at pound dollar as i mentioned Third to the 15th of october could be a very important day for uk eu talks. Maybe it will maybe it won't But nonetheless If you take a look at the price action in the last Couple of weeks The pound isn't that isn't that concerned about about the um About thursday the 15th of october as a deadline Starting has been pushing higher the last few weeks We're pretty much trading on this blue line here the fifth of the moving average Notice how it acted as the resistance not that long ago It seems to have acted as resistance. It's just about clubs above it on friday We're kind of dancing around that metric for the time being the trend for the last couple of weeks has been to the upside If you can get if you can retake the fifth of the moving average Which comes into play at one spot 30 27 If you can retake that and have a decent move beyond that I could take us up towards 132 up toward this area here in a one spot 32 69 Beyond that we could be looking at retesting the highs of early september And if you go beyond that we could be looking heading up towards one spot 35 15 Any move to the downside could fight support from this blue in this yellow line here The 180 moving average in a one spot 20 a 10 And if you go below that we could be looking heading back down towards the lows of mid to late mid to late September in around one spot 26 75 If we have a decent break below this That will be we'll be looking at heading heading That would be multi-month lows and that could point us down towards the lows seen in mid july Coming up to commodities wrapping things up at commodities taking a look with the With the gold market So in the last few weeks and months has been a fairly strong inverse relationship between gold and and and the u.s dollar Gold shed and dollar. So whenever you have a softer dollar, you tend to see a move to the upside in gold And vice and then whenever we see a stronger dollar, we tend to see a negative move in gold So we talked about how recently the pound and the euro have been gaining against the dollar because the dollar has been weak And and what do you know? We've seen we've seen strength in the u.s Dollar in in the gold market because of it So only on on friday just gone. We're leaving in today's session Gold hit its highest level in over and over and about in about two over over two weeks The last few sessions if you're moving it's been kind of It seems to be kind of slotting in it's been moving to the upside So it's been slotting in with the broader trend to the upside If you can hold above 1900 because we're currently trading around 1922 If you could hold above 1900 we could but I can retest in this blue line The fifth any moving average in its 1938 and if you go beyond that We could be looking at testing the highs of mid september in around 1973 And if you go beyond that we could be looking up heading up towards 2000 Notice how The fifth any moving average actually support in early september. So and also yet again in mid september So this metric is could be of importance Obviously, there are no guarantees if the if on their hand though the market has a fail stick to Break above and hold above the fifth any moving average if it runs out of steam and turns over on itself We could be heading back down towards 1900 And that is and if you go below that we could then potentially look behind back down towards the lows of late september in around 1848 and it's only really if you have a break below 1848 because that would be because they would be thinking right this trend Basically from the highs of Of early august downwards the name that negative trend is back in force and should that be the case We could be like you're heading back down towards this zone here down around 1800 Now lastly coming on to The oil market spring crude oil december contract So even though we finished in the raid on friday, we've had a very positive run in in the oil market last week There was strike action in Oil workers were on strike in norway that impacted supply concerns in addition to that All the news in relation to a hurricane descending upon the goth of mexico And that and that meant that say over 90 percent of production In that region was taken offline That really ramped up the price of oil But notice how the highs of october here failed to actually take out the highs of mid september. So Even though it was quite a bullish move We haven't really shaken off this recent downward trend Whereby we've had a lower low a lower high a lower low and a lower high So we'd really need to be taken out the highs in mid september Before we could be before we could become confident that the wider upper trend is is uh is still intact So we've given back some of the ground And on today and on friday, we give back some of the ground that was achieved between tuesday and thursday um, so But let's not forget to get a more recent negative trend of the last few weeks If you do press on lower from here if you go below 42 We could be like heading back down toward this zone here in a 41 spot 22 And a move below that could take us back down towards 40 bucks And a move below 40 could take us out towards the early october lows in around 38 it's about 79 On the other hand if you if um The market is just having a bit of a correction Before it continues in the more recent upward trend if you do press on higher from here If you take out the highs of early september Uh, we started mid september which come into play in around 44 spot 29 If you go beyond that we could then be looking at heading up toward this zone here in around 45 dollars And if you go beyond that we could then be looking at the tension testing the uh, the recent highs that were achieved At the recent multi-month highs that were achieved in late august That's all from this video. Thank you very much for listening. Have a good training week and good luck