 Hello, welcome to this week's weekly charting analysis webinar with myself, Jasper Lawlam. Right now we have the risk warning on the screen, we'll just get through that and get started shortly. Okay, it's quite a big week for trading this week, no less than potential Scottish independence from the UK, Federal Reserve meeting with the prospect of a potentially more hawkish FOMC, Bank of England Minutes, the ECB introduced their TLTRO bank loan program and show the uptake for that on Thursday and on the same day we have the Swiss National Bank potentially setting a negative interest rates. So quite a few things going on and we'll cover some of the major asset classes and how they could be impacted by these events this week. Now firstly, just thinking about the Scottish independence, probably the two markets to be most receptive or most reactive to the vote would be the British Pounds, particularly against the US Dollar but also against the Euro and some of the other major trading currencies and the UK 100 as traded with CMC markets. So if we pull up those charts now, now this is a weekly chart of the bound against the US Dollar, you can see that we've pulled higher just above this 160 level, we've got as high as 172 in June and in the middle of July we tested it and have since plummeted having traded below this rising trend line and we made a gap through the 38.2% retracement level. No surprise that it was at this level because this was when in the latest set of polls it was the poll in which the yes campaign was marginally ahead, I believe that was the you gov poll and poll subsequently has suggested actually the no's are ahead and the general bias out there does seem to be amongst business and investors that the no's will come out ahead and Scotland will vote against independence but that said, the pound has been under pressure but it has rebounded from some of these lows after that poll and general consensus pointing towards a no vote but still definitely under pressure and this 160 does remain vulnerable. What we could see is often that first candle stick down to the support area or potential support area at least is not the very bottom particularly if we're talking about a reversal trend not just for example here you could just say this one long leg doji type pattern hammer was just a correction was if you look farther back in the chart and you're looking more at sort of here for example you have a long leg down a slight lift up recovers a bit then drops down again so we could see something like that into the 160 level and the 200 day moving average and this 61.8% retracement of the 2013 rally and then a subsequent move higher that would most likely be in the situation of a no vote in which case the cable would be able to trade at higher levels you feel like probably a yes vote would be negative for cable though quite how negative and how far it can go down it's hard to tell because there isn't really a precedent for a referendum on this scale in the past we've had one in Quebec but really not a substantial financial economy and and nevertheless that was a no to independence anyway so so very hard to tell exactly how far this could move you could theoretically see on a yes vote drop all the way down to 150 a thousand pit plus move if we flip over now to the FTSE so the UK 100 this is a kind of shorter term pictures you can see we're kind of trapped into a slightly rising range here with some kind of declines happening in the latter part of the range but if we flip out to our longer-term chart we can see that really the 6900 as we've discussed on many times in the last year plus is the key barrier and run into it just short of it again and now on the shorter time frames we're approaching this kind of rising trend line which could be part of a head and shoulders top pipe pattern and you can see an equivalent in the RSI has broken lower but it is still rebounding around that sort of 50% RSI level and market kind of still holding above it for the time being closing above it at least but close beyond there could put us down to the 200 day moving average but in the context of a trading range you know these trending moving average type indicators are a bit more meaningless than in a strong trend so maybe some kind of support found there particularly the 6700 round number but then you feel like a break from here could push us down towards these lows towards this kind of 6600 type level but again given the significance of the the referendum you know 6600 may maybe not all that we would do on it on a yes vote you know we could see a drop all the way down to 6,000 pounds which would which would line up with these highs back here and the low formed back in June 2013 now the other big event this week is the FMC the Fed will likely not be raising rates they're still in the middle of tapering their quantitative easing program so what we're really expecting is a tapering of 10 billion US dollars in this month then and that tapering of another $15 in October and that would be that would be the QE program done and then at some subsequent date that is when we'd actually see the the hike in interest rates of really what we're looking for now it just some clues as to the timing as to when that rate hike would take place and there are some jitters in the market that a rate hike would happen a bit sooner than previously imagined just given the strength of some of the economic data coming from the US of late particularly from the labor market where the unemployment rate has suddenly been decreasing we did see a bit of a bit of a sort of missed result from the non-farm payrolls with the print of just around 140k where it has been average topping over 200k but so far that's being dismissed as a bit of a kind of summer blip and not necessarily too much to worry about one data doesn't make a piece of data doesn't make a trend so definitely adds a bit of importance to the September number to see if that has continued next month but for the time being really the US economy does seem to be strengthening and even inflation was increasing so it's still a slight kind of taper off of that in the last month or so but still approaching the kind of levels that would prompt the Fed to action so one of the big things is there's been some discussion that the Fed might change the way they do their Ford guidance again and so rather than kind of a discussion of a considerable time it might move to some more sort of economic market based piece of data perhaps you know where perhaps not explicitly an unemployment rate as was used in the past but something that's not time-based which would leave them open to a bit more flexibility so then it will be a matter of how they do that as to whether that's perceived as hawkish or or or dovish for the US dollar and we've had a look at cable but maybe if we bring up the euro we can see just how you know we saw that big decline in the pound but we can see a pretty similar looking thing in the euro and you can see there's clear distinct manner correlation here a lot of this move has been dollar based as participants have started to believe that the US are closer to a rate hike than perhaps previously imagined so this is largely a dollar dollar denominated move and so depending on how the Fed do react this week could be the potential catalyst for whether this move accelerates or whether at these over overbought levels for the dollar or in the case of the euro US dollar that we're looking at oversold levels whether this proves the catalyst to see a bounce back so one of the other things we'll be looking at in the meeting would be obviously Janet Yellen's speech at the end how she orientates herself she tends to be on the more dovish end of the scale but obviously she has to be representing the board as a whole and so some of the members are becoming a bit more hawkish so we'll obviously be looking to see if there's any more dissent and then we'll also be looking at the the dots chart as called to see where some of the members are placing their expectation of where interest rates will be at the end of 2015 and 16 15 obviously been the more the closer date and of the more interest and higher rates for the end of 2015 would suggest that the Fed is either going to heartbreak sooner than previously expected and a more measured pace or perhaps not as soon but when they do at a quick end of pace either which tends to be a bit more dollar hawkish and could see this this move further extended in the US dollar now well given that we are on this this euro chart worth talking about the TLTRO loan program that the ECB will be looking at this week but the thing is it will be of interest to see what the take-off has been amongst banks to provide these kind of cheap loans but it's also worth considering that the ECB obviously have now introduced a new look instituted in the new level of policy whereby they'll be buying asset-backed securities and perhaps does decrease the significance of the TLTRO program so perhaps the results on Thursday won't be as influential markets arguably if the Swiss National Bank did as they've alluded to at the end of last week pursue negative interest rates that that could end up being a bigger driver particularly for the euro Swiss if we just pull that up now there we go obviously been a so if you look on the the long-term charts obviously a completely flat chart because of the peg that the SMB have instituted against the euro at the 120 level and no surprise really that as the price has been approaching that 120 level that's when the SMB have come out and said that they would be willing to accept a negative interest rates as part of a policy tool to ease military policy so that is what caused this this pop up in the price above the 21-day moving average on the euro Swiss and you know should they actually institute such a policy you can imagine we'd would be moving even higher now be a bit so sports of the euro and not so much for the Swiss rank obviously also worth considering that doubling the background is always Russia's possible reaction to Western sanctions so far we've we've not seen anything and that's generally supportive of the German Daks where the German economies more susceptible than others in terms of trade and energy relations with with Russia but aside from that really we should flip over to some of the equity indices here have a quick look at we've looked at the UK would look over in the US we can see there's been a slight sort of divergence as it were between the US dollar and equities whereby theoretically the prospects of a more hawkish Fed would be negative for equity markets as equities as we can see from these long-term charts tend to do well in a low-right low-rate environment whereas the dollar does not and you know the prospect of increasing rates is good for the dollar not so much for equities but the dollar has been has been rallying but but equities are all time eyes as well we have seen a slight decline you can see on the weekly chart the US 30 on our charts at least engulfed the prior two weeks trading action so that's a pretty bearish move and that comes right at the previous high formed in July so a bit of a pullback bit of a bit of uncertainty leading into the meeting but nevertheless still close to all-time highs and whereas the dollars really rallied and you see a bit of capitulation in some of these other major currencies so one of them needs to kind of reprice and so it could again it could be down to this Fed meeting this week as to which one is the one to actually be the one to react accordingly we flip down to a shorter term chart see we see we're in this consolidation area we're looking at these highs here this kind of zone is currently offering support would not quite see the close below there yet but that could be the trigger for further moves down to the high there and then some of the lows that we saw in June and where we were able to break through in this latest rally you see from this consolidation area here see that a bit better on the the short-term chart be aware of a this is kind of a trading range we sit at the bottom the range kind of declining but we've seen the top of the range kind of declining with it should the top of that range break through could draw a line something along here excuse me chart just moved on me break through here maybe a test down at the line again could push us back up to the top of the range but that's maybe that kind of action that would happen before before any kind of major major data raises this week let's have a flip over to commodities because that's been a major of action somewhat correlated with the strength in the dollar or these dollar denominated currencies are not faring so well so let's just have a look at gold here now this is just something interesting bear in mind we don't always look at the monthly charts but potentially this is what we're dealing with here gold is obviously sagging down towards the bottom of its range we'll look at more closely that in a minute but we send a large decline potentially bearish flag of some sort bearish pennant perhaps and then perhaps further move and you'd be you'd be projecting that kind of move down below and we really could see a move back substantially below a thousand dollars per ounce should that kind of projection pattern work out they can see slightly better on the weekly chart that in this trading range we've seen one test of the bottom around 1180 and it looks like we could be in for another should this current trend continue but we've not been really able to successfully retest the highs there we didn't even quite make it to to one four hundred on the test in March and you know just come when nowhere close in this latest rally in July so weakness in the in the gold range not to say it can't bounce off 1180 and break straight through it certainly can but you have to say that the general bias looks especially if the Fed are moving towards combating inflation with higher interest rates you don't need an inflation hedge through gold if the Fed is hiking rates and that you know the general situation looks kind of bearish for gold in the interim just dropped down to daily charts we can see that and we'll zoomed in level you know this was a major potential buying area but really nothing happened there so that you know this and this price action itself is it was really pretty bearish you know you expect some sort of at least I mean we've got a bit of a bounce off the top bit of a pull back into it but really just straight through and based on that you'd assume probably the next level support be the round number I want to hundred and then that's you know those multi-year lows just below that similar thing going on in silver so quite like that silver even more so because silver does have a slight sort of industrial element to it as well so given the the slowdown and the week data that has been seen in China at the beginning of the week at the weekend it's a weak industrial production and retail sales data there you know that's not good for copper not good for silver these more industrial leaning metals and silver has pushed down to almost down to the low from June 2013 and you've heard that I've mentioned June 2013 a few times I mean that was the beginning of the rally in stocks and when gold and silver kind of started to consolidate so not there yet but again similar picture with silver went with declining peaks generally kind of retesting the same area of support this turn line still kind of holding so break through there could give us a bit of a bounce in the interim but we'd need to see something more substantial in the weekly chart to really be fully confident about buying into the top of the range again flip over to those kudos probably been one of the weakest markets out there worth bringing up a chart pattern of mine that I had on the on the breakout which was just this left shoulder head right shoulder sort of break of the trend line the breakdown the retouch of the trend line which corresponded with a matching shoulder and then using the height of the pattern from the head to the neckline we projected down to this hundred percent level and you can see it has perfectly hit that on the money and this was you know this was these patterns don't always work out but you know when they do you know they carry pretty pristine and obviously that corresponds with that that low from back in the beginning of the year so if we push much lower than here we're into new yearly lows for WTI and we can see on the long-term chart that this actually this there is a bit of a trend line going through here with multiple touches so break through down there could see us back down at $78 and you can imagine even lower there's a bit of a supply glut in oil at the moment and we even had the the OECD the think tank revising down its global growth forecast today and that's following multiple institutes including the IMF and World Bank general consensus for weaker growth and you know as such a weaker demand for petroleum products and so you know lower demands higher supply and with no apparent supply disruptions from from Russia as yet then you know that speaks to lower prices but we are at significant level and you know it we probably something to look for would be maybe a kind of basing type pattern and then maybe catalyst for a breakout of the base would be some escalating tension with Russia which you know they don't really seem like like coming down anytime soon they need a pass in all the Western powers nor Putin in Russia look like backing down and tip-tack sanctions are going to maybe eventually spill over into the energy market we've already heard that Poland received 40% less in imports from Russia just in the in the latest comments so if that's something that Russia plan to continue that could threaten the European economy and certainly could threaten supply of the world okay I think we'll call it a day for for this week it's definitely going to be a busy one careful trading around the Scottish referendum it's it's going to be a kind of high-risk high-reward type of event most likely particularly in the event of a yes vote but you know watch out for action in the British Pound and the FTSE but then particularly if there is a there's no vote probably things will calm down a little bit subsequently but if there is a yes vote we could look for some spillover into other markets foreign stocks with large UK businesses any impacts on credit ratings can spill over into other asset classes bonds etc so yep could be interesting the following week should that should that river vote follow through and then in summary for these FX trading you know we've got to pick out for these central banks particularly the FMC and the Bank of England and their minutes coming through thanks again as Jasper Lawler Mike Analyst here at CMC Mark it's good luck trading with a seat signing off thank you