 Good afternoon and welcome to the weekly market update with me David Madden The day's date is Monday the 7th of September 2020 and the time has just gone 1208 for a summer time And it's been a fairly positive start to the European session. We're seeing decent gains across the major European indices They've racked if kind of clawed back a lot of the ground that they lost In the latter half of Friday's session For those of you that didn't see what was going on the kind of big story in the last few days was because we've seen a few we've seen a lot of uncertainty in the Much talked about US tech sector at the back end the last week with some quite a few negative sessions On Thursday and Friday particularly for the Nasdaq 100 very much tech focused We got a huge losses were incurred very big losses were incurred on Thursday Lost large losses were incurred intraday on Friday But the but the even though the Nasdaq 100 and the S&P 500 closed in the red or Friday They were still well off the load of the session. So the markets kind of finding his feet in that regard US equities the actual cast stocks will be will not be trading today because it is Labor Day in the US although the index futures are still trading but It's quite common for the volume the volatility in those index futures to be very low on a holiday day So that's why it's almost like we're seeing it so it seems, you know, it's almost like European equity markets I've pushed higher today possibly for because There's there's not much so much fear that all of a sudden European equities are going to get heavily influenced by what's going on in the likes of Apple and Tesla Microsoft because as I mentioned us actually in individual shares will not be trading today So it's also worth noting. We had a pretty good job support from the from the US on Friday By and large, it was things were well received the number of the job creation was essentially in line with the Expectations the unemployment rate drop drop considerably average earnings were not too far away from expectations as well So so that's so it was a good job support and as way to the argument that the US economy is continuing to recover But the tech story we kind of dominated the headlines And then ask, you know, 24 hours 48 hours We've had we have had some mixed Trade figures from China The exports are quite strong. They grew by 9.5 percent easily topping the 7.1 percent growth That economists were expecting but on the flip side imports dropped by just over 2% and that was it that was a That was well shy of the you know growth of one tenth of 1% that economists are predicting But so it shows which could be a sign that in internal demand in China seems to be weak the strong exports would point to a strong external demand, but that could be a sign that Personally protective equipment We're trying to mix a lot of could be in high demand. So Just that the the strong exports figures don't necessarily mean that the United States, Australia, Europe and the likes are all happening to happen to buy goods It could be to do with PPE as people are referring to it and really on the on the political front Boris Johnson the Prime Minister of the UK has made it clear that if a free trade agreement has not been agreed with the European Union By the 15th of October He's content to walk away from the table and that would that would probably pave the way for a WTO terms of trading in terms of international trade come January 2021 so we're seeing a better pressure on the British pound on the back of that for those of you who followed up the The the video regularly I keep the same structure. I'll talk about the week ahead I run to the big indices the big currency pairs and the big commodities If you go to CMC markets calm, you can find a week ahead article under insights and then then you scroll down from insights latest news analysis This week tomorrow we have at first half figures from JD sports We have second quarter numbers out from slack technologies the messaging company. They're one of the companies Which probably did quite well out of the working from home Working remotely craze that's taken off in the last 100 months amid the risk amid I made the the lockdown Nobody changes expected from the Bank of Canada in the station on Wednesday Well, we've had some numbers from China this week as I mentioned We've already had the trade numbers came out overnight During the week, we have Chinese CPI and PPI and this is gives a flavor for what demand is like in China We've already seen that the import numbers weren't weren't good. That suggests weak internal demand But let's see what the CPI and the PPI numbers turn out Donnell the first a full year numbers on On Thursday, they weren't the kind of success stories as far as as far as retail goes different done quite well The European Central Bank no major changes expected from their monetary policy Their update will be on Thursday But listen out for any comments in relation to how the recovery is going because some of them some of these of the services and Manufacturing numbers from some of the big eurozone economies have kind of tapered off So it's gonna listen up for any commentary if they're concerned about that We are first-time figures from Morrison's by and large the UK supermarket sector has done quite well Amid the amid the crisis. We saw a lot of people were going out snapping up Food items because of because there's a lot more because amid the pandemic We have four quarter numbers from Peloton The technology and fitness company on Thursday We also have the as we do every Thursday the job is claims reading from the US on Friday We have the GDP reading for the UK. That's going to be the the the Monthly report for the month of July and we also have US CPI On Friday. So starting off with the foot 200 I run through the footsie the Dax the Dow and the S&P and I cover the indices section So if I had a big move to the upside from the lows of March into the highs of August So the highs August of June But if you can see here ever since then you've been in a downward trend, you know We've had a couple of lower lows and lower highs in fact last Friday if I back to a level last seen in early mid-May Which is quite quite worrying But we can see here though that today's candle has been quite bullish It hasn't really recoup the losses of Friday and it certainly hasn't recoup the losses that were occurred on Thursday Like I said the tech set off in the US really began on Thursday and that drove your that repulsed European markets lower So we're still below the lows of Thursday So we're still in this kind of downward trend of the last of the last few weeks If you do manage, you're gonna break below the recent loan in at 5,767 I could take back down towards this is old here down around 5,660 and if you go below that we could be heading down towards 5,600 Any move to the upside are likely to incur resistance in around this area here 6,000 not only is it a big psychological number, but also we have seen some consolidation in that zone If you go beyond that we can then be looking heading towards this blue line the 50 movie average which comes into play at 6106 and notice how in August a couple of occasions that metric acted nicely as Resistance and if a metric has been has been of importance in the past It makes it more likely if you be of importance in the future although there are no guarantees Taking a look now what's going on over in Germany the DAX German market isn't better shape Then the US than the US market in fact on Thursday in the first half of the session you're before the tech for the US Tech sector dragged everything lower The European stock markets were doing quite well on Thursday morning In fact the the DAX had a multi-month high and get a bit of its highest level since February. So we're talking about Highest level in over six months nearly nearly a seven month high. So things were looking quite positive On the DAX on Friday, we can see here that we have moved lower It did trade below this blue line here at the fifth of the movie average, but it closed well off or well above it And on today's candle, even though we try to dump towards the fifth of the movie average We're still well above it if you can hold above that metric that blue line It's like he at the wider upward trend of the last few months is going to continue I show you press on higher front here. We could be looking at you back up towards 13,200 and if you go beyond that we could be looking at retesting The the the recently at the early September highs and if you go beyond that you can maybe look at targeting this area here in around 13,500 Like notice how on a few occasions the fifth of the movie average this blue line here Active nicely a support on a few occasions is trying to blow open it But but when it has straight up below to be short live and a quickly rebounded as you saw here on the 21st of August So if we do have a significant break below that that could be a sign Maybe there's this weakness in the upper trend and if you do move lower than the 1550 movie average Good head back down towards this zone here in around 12,600. We can see in a few occasions There's a bit of consolidation in that zone and in early August Let's take a look what's going on over the US like I said US in this the index futures Are trading today, but the actual cash stocks individual shares are not trading today. So if we take a look at what's going on the US You know, we're talking about we're a multi-month highs We're the highs in early last week on the first few days of last week We were levels last seen in February. So we're talking about multi-month highs, but obviously quite a very aggressive Sell-off on the Thursday another pretty aggressive sell-off on the Friday We haven't we're kind of trading at a fairly small range in today's session And I suspect activity in the Dow Jones and they have to be if I find her under and the national I are a lot like it to be quite low today as I mentioned the US is on holidays But even though this has been a brutal sell-off, you know The wider trend is still very much intact and even though we've had a pretty painful sell-off in a few sessions We're still called to be above the fifth any moving average just blue line here And if you could continue to hold above that metric, it's like that the wider upper trend is going to continue If you do press on higher from here, we could be looking at you know heading back up towards 29,000 and if you go beyond that we could be looking at retesting the kind of recent highs which come into play in around just just just shy of 29,200, you know once again talking about a before how metrics being important in the past are more likely to be of importance in the future on a few occasions the 50 moving average the blue line act nicely as Support so keep an eye on that on that should we see a large move in the downside? But even if you do drift lower from here support could come into play in around here in around at 27,449 And if you go below that we could then head back down towards the fifth to date moving average Let's take a look at the S&P 500 So as you can see here a series of all-time highs were notched up huge sell-off was Very big sell-off was registered on Thursday quite large sell-off it was registered refined as well similar situation whereby Today's range is quite low volatility is going to probably is likely to be quite low today but even though We had had a few negative days at the back of last week quite size of ones the wider upper trend is still very much intact and To be honest, even if you can hold above You know things are like we're you know if you look at the index futures We're still expecting when cash trading does begin in you know over 24 hours We're still expecting it's about to open above 3,400 and that was a metric which in a few occasions acted as resistance on the way up so could act as support and Other that that the at the market set a sell-off See even if we do drift lower from these areas support could be found from this area here in a 3550 notice how the lows of Friday there they're about coincided I found support with the lows from late August and even if you go below that this area here in a 3326 collected support. I once again the fifth that we would be average this blue line Active nicest support in a few occasions and that and that comes into play at 3,309 Take a look what's going on with the indices Sorry, I said indices and currencies. We've just finished indices The dollar is a as yet again moved a bit higher We saw the dollar close higher last week on Thursday Tuesday Wednesday at Thursday it was trading it was trading higher Friday But in the closing slightly lower With that we see weakness in the in the in the Euro and the British pound in the last few sessions even though You know just over a week ago I've just in it just less than a week ago the Euro dollar hit a 28 month high It has been drifting lower since the dollar has fared up a bit But still the wider upward trend of the last few months is still very much intact. You know if you could hold above This area here in on one spot 1696 it's like that the broader positive trend is going to continue and even if you go below that Not too far away below the fifth that it would be average which actually I see a support back in March back in May rather That that could easily act as support potentially act as support And that comes into play in at one spot 16 56 You know even the last few sessions didn't really even when the dollar has been stronger It didn't really manage to push the euro that much below 118 one spot 18 So the upper trend is is is still intact if you take out the reason high and we go kind of well north of 120 We could then be looking at targeting one spot 2140 and we haven't seen one spot 2140 This is this area here. We haven't seen that metric. We have that level since may mid-May 2018 Take a look now at pound dollar like I mentioned we've seen a bit of rebound in the US auto So that's an issue for stirring the sterling but also was an issue for sterling is as I mentioned at the top of the webinar There's a bit of brexit certainty the British government have essentially said if you don't get a deal by 15th of October willing to walk away, you know, would you would you pave the way for kind of a WTO style? Trading arranging between the UK and the European Union come early 2021 And that has put a bit of pressure on the British pound and a huge amount Hasn't help it's it's added to the kind of recent move to the downside Only only in Tuesday last week the British pound against the US dollar has highest level since mid December 2019 So it already it was already coming off quite a bullish run It was giving back some of those gains the political certainty has put additional pressure on them on the pound today So if we do drift a bit lower, we could head back down toward this area here one spot 30 It's a big number on a few occasions that region actually acted as support to keep an eye for 130 And even if you go below that this blue line here the 50 movie average in at one spot 2929 could act as support but keep in mind in the last few months buying on the dip has been a popular Strategy, so if you look to press on higher from here, we could be looking at heading back up towards 134 We could be looking retesting the September high and if you go beyond that you give looking at testing the high that was posted In mid-December last year in at one spot 30 one spot of 35 15 Lastly coming on to Commodities starting up with gold. So in the last few months has been a strong inverse relationship between the US dollar and gold So it's no coincidence that we've seen a stronger dollar for much of the last few sessions so the dollars turned around began on And they can around kind of lunchtime or late morning of Tuesday the 1st September So it's not coincidence. We're now seeing if you've seen a stronger dollar in the last few sessions So it's not coincidence. We've now seen a bit of weakness in gold But but the move in gold hasn't been particularly aggressive to the downside even when gold has come under pressure It's still well above as 50 movie average And it's still well and it's still come and I still comfortably above the kind of big psychological number of 1900 Even the lows of late August didn't quite get down as low as 1900 So the wider upward trend is still intact keep in mind. It was only About a month ago. It had an all-time high So the wider trend is still very much intact if you do look the press on higher from here We could be looking at testing the highs of last week in around 1963 and if you go beyond that you can look at it towards the Psychologically important 2000 and if we just we could be looking at testing the kind of mid-august highs And then if you go beyond that, we could like a track retesting the all-time high If we do have a decent break below 1900, we could be like heading down toward this zone here below in 1863 we can see here that that was the lows of the middle of August after the aggressive sell-off And so really if you have a decent break below that could then we begin to think okay Maybe we could be like the heading back down towards 1800 and notice how in general zone of 1800 In 1813 down to around 1795 that general area There's a lot of consolidation before had the next move to the upside. So if we do head down towards that zone There's aggressive move at the downside that area might act as support And lastly I come on to Brent crude oil the November contract and we finally had a bit of interesting move in the oil market The oil market that's going to go on a large recovery between late April Into early August it hit a five-month high In a five-month high in August did really Make much more ground in late August it got closer for the early August high But but it doesn't really move it hasn't really moved on in the last few sessions We see the move at the downside there be concerns about Falling gasoline demand in the U.S. The Russian energy minister over the last few days I've talked about seeing global demand for oil tapering off It also hasn't helped that when you've seen large uncertainty in the stock market, which is going to risk on assets That's also impacted the kind of perception of what's going on in the in in Oil so seen aggressive moved seen a fairly decent move to the downside in the oil market We're currently trading at 42 just just not a 42 bucks a barrel for Brent crude oil November contract Notice how the level that we're pretty much at right now It's not too far away from this zone which acts as a support on a few occasions if you can hold above that level It's like that the wider open trend could continue But if you didn't move lower from here We can head back down toward the lows of late June in around 40 spot 22 And you know down to kind of 40 40 bucks a barrel itself that zone could act as support But keep in mind the wider trend is to the upside so if we do move higher from here We couldn't be retesting this blue line the 50 movie average which acted on a few occasions recently as resistance. So If you know that resistance, we need to be kind of clear before we could look at retesting the kind of 46 zone That's all from this week. Thank you for listening. Have a good trading week and good luck