 Hello and welcome to CMC Markets on Tuesday the 30th of September and the weekly market update and the end of the month and the end of the quarter and it's been a bit of a strange September if truth be told. We've obviously had the Scottish referendum. We've had another rate decision from the ECB where they eased policy further and we've seen new record highs on the S&P 500 yet I can't get away from that inescapable feeling that some form of nasty shock is around the corner and we've seen once again geopolitical concerns once again added to the mix this time out of Asia with the unrest that we're seeing from Hong Kong and that's really filtering through into Asian markets at the moment and now there are concerns about certainly the health of the economic recovery in that part of the world notably in China obviously Japan as well we've seen a significant sell-off in the Nikkei but what we've also got this week is a whole host of very important economic announcements this week from the ECB once again where we're getting an awful lot of speculation that we could well see further announcements of further stimulus from the European Central Bank and we've also got US non-farm payrolls on the back of further descent from the FOMC we now have two dissenters on the FOMC committee and to go with two dissenters on the Bank of England Monetary Policy Committee so I think the coming quarter is going to be a very interesting one indeed but for today's market update I'm going to be looking at Euro dollar and the prospect for further losses on that particular currency pair I'm going to be looking at dolly yen as well and looking at the prospects of further gains there looking at the S&P 500 the key levels on that particular chart and and some key levels on the Nikkei 225 as well so let's make a start with Euro dollar and the daily chart because it's a it's going to be a big week for the Euro we've seen some very poor economic data out over the past week or so CPI data core prices have slipped back and that's really reopened speculation of further measures from the ECB at this week's rate meeting in Naples now in the last couple of days the Euro has broken down through a number of very key support levels which would seem to suggest we could well see further losses so let's look at the daily chart now the daily chart is showing us that we've broken through that key 61.8 Fibonacci retracement level that I've talked about in previous weekly updates at 127.80 that's gone it's history it's behind us and really if we need to if we're going to see a significant rebound in the Euro we really need to get back above that what we've also done is we've broken below the lows that we saw in November 2012 at 126.60 we're below that now and the likelihood is that we could well see further losses going forward what we really need for a stabilization of the Euro dollar is really for the Euro to recover back above 127.85 and that old 61.8 retracement level from the lows in 2012 when Mr. Draghi out of those immortal words to do whatever it takes to the highs that we saw earlier this year just shy of 140 and the first the first support that I can really find on the chart in front of me right now is those lows just to the left of that low in 2012 at 122.85 123 now if you look at the daily chart and you look at the oscillators it's very oversold and if you look at the weekly chart it'll also tell you it's very oversold but a chart can stay extremely oversold for quite a significant amount of time and that's something that you really do need to bear in mind when you're looking at trading Euro dollar or any other product for that matter now the key question now is given the poor economic data that we've been seeing coming out of the Euro area what the ECB will do at their meeting in Naples this week and my hunch still remains that they will probably do nothing we may see further colour on the ABS measures that were announced in September it's unlikely the ECB will announce further measures so soon after the measures they announced in September so I think if the markets are pricing in the prospect of further stimulus they could well be disappointed and we could get a bit of a short squeeze in Euro dollar we're certainly overdue one it's also a big week for the US dollar and so there is a US dollar side to this story we've got US ADP we've got US non-farm payrolls and we've got US ISM now I think most markets will most market participants will be focusing on the non-farm payrolls number now you may recall the August number was very very disappointing it came in 142,000 the worst the worst figure this year will there be an upward revision to that number that's going to be one of the key factors to focus on on Friday also keep an eye on the average earnings numbers because if they start to tick higher that could be significantly dollar positive and actually could push dollar yen higher now let's look at dollar yen in that context because we're getting very very near that 110 level looking at a Japanese candlestick chart in the same way that we were with Euro dollar we broke above that 105 50 60 level and those of you who follow my weekly market updates will know that you know once we got a break above that level then the likelihood of a significant break higher was significantly high and we've certainly got that the next resistance level is the horizontal line that I've drawn through the highs from late 2008 and that comes in at 110.70 so if we get a fairly good non-farm payrolls number positive payrolls number positive US data we could see US dollar yen push up towards 170 now if dollar yen does break higher that could actually have significantly positive impact for the Nikkei but now if we look at the Nikkei chart we can also see that's pushing against significant resistance from the 2013 highs but it's come off in the past few days over concerns about the unrest in Hong Kong a slowdown in China as well as disappointing Japanese economic data but I think the disappointing Japanese economic data makes it much more likely that the Bank of Japan could well be more accommodative that will certainly be yen negative Nikkei positive so if we get a break higher in dollar yen we could also get a break higher in the Nikkei. Last but by no means least let's have a quick look at the S&P 500 this is a daily chart that we're looking at here and if we draw a trend line from the 2010 lows that currently comes in just below the levels where we are at the moment around about the 1960 level if we get a sell-off from current levels that's the key level to watch over the course of the next few days. Okay so that's pretty much it for this week thank you once again for listening just a quick reminder to tell you that we have a non-farm payrolls webinar on Friday between 1.15 and 1.45 I'll be hosting it along with my Canadian colleague Colin Szezynski so if you want to listen in just sign up along this link here and hopefully we will both talk to you then. Thanks very much for listening.