 Hello and welcome to the Monday Market Update with me Dave Madden. Today's date is Monday the 6th of August 2018 and the time has just gone 11.25 British summer time But to be honest, it's been a fairly slow start to the week What's continued to rumble on in the financial markets is the trade tensions between the United States of America and China Over the weekend President Trump Stated that the US is winning the trade war against China and he stated this because it was announced on Friday that the Chinese stock market by By market capitalization is no longer the second largest stock market in the world It's not being replaced as Japan by Japan as the second largest stock market in the world And given the decline in Chinese equities in recent months President Trump as a Trigbidid the trade war on the sanction are the tariffs that is imposed on China and the threat of further tariffs as The reason why the United States is winning the trade war against China and President Trump loves to win And while he feels he's winning he's likely to continue to continue the tough line against Beijing There's been no other major economic indicators or stories out this morning except for quite a digital set of German factory orders The most recent update show that factory orders in Germany declined by 4% Which is quite significant seeing as the economists were only expecting a decline of 0.4% So much of ours that they expected drop in German factory orders This put a lot of pressure on the tax at the beginning of the session, but the market has managed to recover some of the losses Taking a look now at the the week ahead and the week ahead Article can be found on our website if you go to cmcmarkets.com and look under news and analysis You will find that the at the week ahead article. So looking head to tomorrow. We have the Reserve Bank of Australia update No changes is expected today on policy also tomorrow tomorrow intercontinental hotels have first-time figures out also tomorrow Snap have second quarter numbers out on Wednesday We have the trade balance figures from China traders Of course are going to be keeping an eye out on the imports and exports component of this See how well the Chinese economy is doing especially in light of the trade spatter that the each at the China has with the United States Wednesday, we also have a fourth quarter numbers out from 21st century Fox on Thursday We have first half figures out from Sydney world and on Friday. We have UK second quarter GDP Now taking a look at some of the major markets starting off with the FTSE 100 We could see here that at the FTSE 100 is broadly been range bound the last number of months The kind of the top end of the range will be in it's just shy of 7,800 to the low end just south of 7,500 We could see that the market at a very impressive rally between Between March and May and ever since then it's broadly been trading sideways Largely a bit to the upside If you take a look at the ground that was lost between the high of May and the and the low in June a lot of the Ground has been recovered and we're just about clinging on to the 50 day moving average this blue line here, which comes into play in a rock which comes into play just in around the 7,000 7,600 and 60 level I think I managed to hold above that we could look look at retesting the the mid-June highs of 7,794 and if you go beyond that turns they'll be looking up towards the 7,900 region to be honest It's only for takeout this low here in late June of 7,482 this price here Because then what I should traders begin to begin to get worried and that could signal further losses As I mentioned the German market at a fairly size will sell off this morning on the back of those dreadful factory order figures Take a look now at the price action on the German market as we can see here the German market has been a decent of Push higher between late June and July But as you can see the market has managed to drift lower again rock rock well below this red line here at the tourney moving average and The tourney moving average is a fairly good barometer Of a market sentiment and seeing as it's below the tourney moving average Easily below the tourney moving average. It's like that's a negative indicator I think negative sign and it could point to further losses And if while we remain south of this red line here at the tourney moving average which comes to play at 12,764 While we remain south of that it's like it that that losses It's likely that sentiment could remain negative and if we manage to drift low from here We could be looking at targeting 12,500 notice how we have seen a bit of support in that area recently And if you go south of 12,500 the next step to keep an eye for is this one here on the The low from the from the 11th of July at 11,390 and if you go south of there We could be looking any back down towards the 12,000 250 area It's only if we do to have a size will move back above the tourney moving average Should enter it is actually then start to look to Maybe look towards the late July high of 12,878 and if you go beyond that The big psychological number of 13,000 will then come into play I'll take a look now what's going on on the US markets The S&P 500 continues to in its upward trend The S&P 500 as we've been broadly speaking been in an upward trend since early April A fairly good example of an upward trend were by a series of higher highs and higher lows all the way along We can see here that even though we had a fairly sizable sell-off In late July on account of the major decline in Facebook The market has managed to recover most of those losses. We're not too far away from the from the july high which comes into play 2848 and if you go beyond that That level of traders will then be looking out to the january high and the all-time high of 2877 any moves to the downside My finance support in around the 2800 region big psychological number or perhaps even below that at the 2791 area Notice that we did see quite a bit of both resistance and support coming into play from that area not too long ago As you mentioned about Facebook, I'll also keep an eye keep on with the with the tech team Keep a look at this now This is the nasaq 100 nasaq 100 like I said I also had a fairly sizable sell-off given the major sell-off that we saw on Facebook not too long ago But the market has been recovering recovering and if it does manage to continue that the in the wider upper trend that it has been in We could be looking at a return retesting 7500 Any moves to the downside and the nasaq 100 may look at finding support in around the 50 moving average this blue line here at Which comes into play at 7,220 As I said, it's active as support number of occasions in Recently so chances are it could act as support again in the near future Take a look now what's going on in the gold market and the gold market only only Last friday the day of non-farm payrolls in the united states fell to A 12 month low fell to a level not seen since july last year I got down to just south of 1205. It's been a classic example of the downward trend Series of lower lows and lower highs on the gold market So the trend is very much at the downside if you did manage to keep driving lower from here We could be looking at our getting 1200 big psychological big psychological level and if you go south that we could be looking at the low From that mid march last year 1195 and we go south of 1195 We could be looking heading back down towards 1180 or sorry. I apologize. I apologize 1179 1179 was the Was one of the reaction low In late january 2017 Taking a look now at a couple of currency periods before I finish things up So the euro has been in a fairly uh, pretty downward trend versus the the the u.s. Dollar Since April a lot a lot of ground here. I had a fairly decent recovery in june But if you draw a high if you draw a trend line from the from the high in mid june and tracking the Tracking the highest throughout july and august We can see at the market at this at the market for the time being is up being this trend line resistance So the market can't really get above this this trend line resistance here and the pressure is still on the euro to the downside So if the if the euro while the euro remains effectively below this trend line Here the the high from the mid june tracking the highs in july and august while it remains south of that trend line It's likely that the outlook for the euro versus the u.s. Dollar is going to remain bearish And there to keep an eye for will be the one spot 1510 region And if you go south of one spot 1510, it could pave pave the way for 114 to be targeted And just to finish things up now on the pound versus the u.s. Dollar The power versus the u.s. Dollar has also been losing ground, uh, since august Sorry since april rather, uh, it's been in a fairly steady downward downward decline The updates in mr. Currie the back end the last week talking about Looking at potentially the bank of England I can say once a year for the next number of years, but he also Issued a warning in relation to what the what could happen the uk and economy Should the the uk leave the european union without any any deal in place Notice how today's lows managed to actually take out the most take out the most recent low So we're back to uh to levels not seen Uh since september 2017 and the pound versus the u.s. Dollar as a decade indication Of how negative or bear a sentiment is what we're talking You know 10 11 month lows on the pound versus the u.s. Dollar So the sentiment is very much to the downside if you continue to move lower from here We could be looking heading back down towards 129 oppressive 128 It's only really if you're going to snap above this blue line here the fifth of the moving average Which comes into play at one spot 3212 Because then we actually looked to actually try and get a bit of confidence back in the pound versus the u.s. Dollar Notice all this one occasion the The the fifth of the moving average did manage to act as resistance and a couple occasions It got quite it got close to it to the fifth it got close to it But didn't actually quite get there So the pound was in very much a negative trend in the against u.s. Dollar And even if it did manage to retake the 15 moving average the next day's keep an eye for will be the mid july high of One which comes into play at one spot 33 63 and if you go beyond that We could be looking at the early june high of one spot 34 72 any potential resistance levels for the pound Should we see a snap back? Well, that's all for me this week. Thank you very much