 Good morning and welcome to the weekly market update with me, David Madden. Today's date is Monday the 25th of January 2021, and the time has just gone 1101 GMT. And it's been a pretty quiet start to the European trading session. At the back end of last week, we saw US stock markets rack up yet again new record highs on the back of the hopes that the new president, Joe Biden, is going to get down the stimulus route. Overnight in Asia, we saw strong gains. But the European markets had a pretty quiet start to the trading week. And things have seemed to have gone progressively worse. We're seeing relatively small losses being posted here in Europe. Every market's down in the region, 0.3%, 0.5%. Nothing major, but in the first couple of hours of trading, kind of flickering between somewhere slightly higher somewhere slightly lower. It seems to me that there was kind of a bit of a muted mood in Europe this morning. And things just kind of be, whatever positive sentiment has we kind of chipped away at. Essentially, there's been no massive or major news to really kind of spark excitement in one direction or another. But there is some kind of lingering concerns in relation to the health crisis itself and particularly the lockdowns. France has already had quite tough restrictions in place, but now there's kind of a toll in speculation. We could have a full-on lockdown, national lockdown announced in the coming days. There's concerns at the rate at which the European Union is rolling out its vaccinations. So that's kind of hampering fears. And obviously, we've had quite tough restrictions in Italy, the Netherlands, Germany. And obviously, it seems that the restrictions are getting harsher and deeper and are being extended further all the while. The roll-out of the vaccinations is about to be slow. So until we get signs that they're going to be edging towards stop adding new restrictions or even undoing some of the restrictions, sentiment in the European Union could remain weak. The U.K. has had its ups and downs in relation to the health crisis. Matt Haringcock, the U.K. Health Secretary cautioned that there could be further travel restrictions for international visitors. That's likely to be announced in the next 24 hours, 48 hours. That's impacting particularly U.K. airline stocks this morning. But on the plus side, the British government has done quite a good job in relation to rolling out the vaccination. So it's been a bit more of a mixed picture in relation to the U.K. situation on that front. Overall, sentiment, voluntarily, isn't particularly strong. It seems to me that, you know, whatever is positive, it did have a while ago to seem to have kind of gone every way. As always with the video, what I'll do is I'll run through the major events of the week and then I can look at the big markets. So we'll start off looking at the week ahead article which can be found on our website, cmcmarkets.com, under insights, and then under insights, under latest news and analysis. Today wasn't a particularly busy day in terms of corporate or economic announcements. Tomorrow morning, we're going to have the U.K. unemployment rate. Keep in mind this is for November. It's a delayed number, but that is worth noting that it's going to be of importance. We also have consumer confidence for January of the U.S. tomorrow. This is going to be important because there's a lot I want to find out. How are things going to progress in relation to people going up in the U.S. and spending money, particularly in the post-Christmas period? Was it a case that people spent money in around November and December? But they feel a lot less confident about spending money in January? Or is it the fact that the announcement of the last-minute stimulus package for the U.S. $900 billion at the back end of 2020, combined with hopes around our President Biden coming into office, would have assisted sentiment? We have a few big stocks announcing their numbers this week. First of all, we have Q1 results from Apple. We have Q4 on Wednesday. We have Q4 numbers coming out from Boeing. Facebook have the four port numbers coming out. And we have that also on Wednesday. We have Q4 numbers coming out from Tesla. Tesla's share price has gone up on a stellar run recently. That's going to be very much in focus. At the beginning of the year, they announced that their 2020 production target was ever so slightly missed. They missed off by an absolute fraction on that front. But nonetheless, given that there was obviously the COVID-19 crisis, it did impact production. So you can look at it one way and say, they did quite well. They did very well considering they almost got their target ever so slightly shy of it, despite the fact that there was a global pandemic. Wednesday, we also have the Federal Reserve meeting. No changes is to be expected there, but any kind of commentary in relation to changing inflation in the U.S. or the perception about when they'll be looking to do any sort of tapering or raising of interest rates, but any kind of updates you have from the Fed that don't seem any keen in even beginning to signal when tapering of the bond line scheme is going to happen. American Airlines will have Q4 numbers coming out on Thursday. Obviously, the airline sector has been quite heard. The cash burn rate will be very much in focus. First tap numbers coming out from Diageo, the big U.K. drinks company are coming out on Thursday. We also have tying in with that topic. We also have Fever Tree, a well-known tonic maker. That's kind of tying in what we probably saw out of Diageo. It's highly likely that we see figures of retail sales or sales of supermarkets increase, and that hopefully should offset the sales that were lost at the likes of restaurants and bars and pubs. And finally, we have full Q4 GDP numbers from the U.S., and we also have the spending and income numbers for December for the U.S. This is going to be important because we want to see how the U.S. economy fared up and held up in the last few months of 2020 and also what was spending like in the all-important month of December, which is obviously a big month for giving Christmas as a big spending holiday. Starting up now with the major indices, I'll take a look at the FTSE 100. So the FTSE 100 racked up in multi-month high in January, and ever since then it's been trading a little lower. Back in early January, it's hit its highest level since February. So we're talking not quite a year high, but not too far away from it, which obviously in itself is quite bullish, but it has been drifting a little lower. And we can see here, the market's been moving lower. If you look at the MACD indicator, the MACD histogram, negative momentum is on the rise, the market's moving lower. That's been kind of, we can see that negative momentum is rising. So we could see a continuation in the move to the downside, and if that is the case, we could be heading back down towards this blue line here, the 50-day moving average, which comes into play at 65.49. And if you notice how that metric acted nicely as support back in October, it also acted resistance in November as well. So the metric has been important in the past. It makes it more likely it'll be of importance in the future, but obviously there are low guarantees. And even if you do drift down, it lowers the 50-day moving average. We've been in a solid upper trend for the last few weeks and months. So that's not to say that if you do move lower from here back to the 50-day moving average, that would negate the kind of wider uptrend that has been in place since late October. So even if you do go to the 50-day moving average and if you go below that, we can then be looking at targeting this zone here, down around 6,255. Down around 200, well, maybe kind of down around 6,260, 6,250, that kind of general kind of zone. And we can even head back to there and still be in the kind of wider uptrend of the past few months. Take a look at what's going on over in Germany. It was only in the early week, early January that the DAX hit an all-time high. So that gives an indication of what the bullet sentiment was early on this month. The market has come back a little ever so slightly since then. It did drift lower into the middle of the month. It's been trading range now in the kind of sideways recently. We're not going to see any kind of clear indicators of which, you know, are we going to snap out of the kind of sideways move that we've been in. But at the same time, the broader uptrend is not very much intact. You know what I mean? If you take a look at the last few sessions, it hides in me getting higher. Although, sorry, apologies. The lows have been getting higher recently because the lows last week were above that of early on in the week. Nonetheless, we're not really seeing many higher highs, but the broader uptrend is still very much in place. If we continue to move higher from here, we could be looking at retesting 14,000 big psychology lumber. And if you go beyond that, we could be looking at testing the kind of all-time highs that were achieved in January in around 14,134. And then if you go beyond that would be the kind of new, fresh, all-time high territory. So, in terms of what we're looking at for levels such as 14,200, 300, so on and so forth. If you do have a pullback in the index, support could come into play in this blue land year, the fifth of the moving average, in a 13,521. We can see in a few occasions in the last few months, it has a bit of importance in the past, back in early September. So, we have a relevance in early October and once again in mid-October as well. So, keep an eye out for that. If we do have a fairly decent move to the downside, we have a fairly large set off. This is the general zone here on the lows of late October, the lows of mid-December and the lows of late December. Both levels all come into play in around 13,000 itself. So, maybe a bit north of it. But keep an eye out for that general area. I'm sure we have a fairly large pullback in the index. U.S. markets, as I mentioned, we're in a strong position. We saw record highs recently. They're in quite good shape. They're in better shape than their European counterparts. So, even though, to be perfectly honest, the ranges that we're seeing in the U.S. markets are quite low. It's trading a bit sideways. To be honest, it looks a bit dull and a bit muted, but nonetheless, we're kind of broad of our trend over the last few weeks and months. It's very much in place here in the Dow Jones. We're currently expecting the Dow trading its underway to open north of 31,000. So, if we get a press attire from here, we could be looking at retesting the recent highs in around 31,286. If we go beyond getting up to 300, 400, small as the fourth, it's only next to a really big level to keep an eye for, maybe 32,000. If we do see any move to the downside similar with the DAX and the FTSE 100, we could see support coming to play from the fifth-day moving average. We saw a nice support back in late October. There wasn't consolidation from that area in early November. Myologies. And even if we do a fairly big break below the fifth-day moving average, we can head back down toward this zone here, down around 29,461. It's a similar situation with the S&P 500, whereby we're just kind of trading in relatively small ranges. Nothing too exciting, but we're basically essentially within a whisker of the recent all-time highs. As you can see here, in the strong upper trend for months and months, all-time highs have been achieved. In your trend, this is very much to the upside. If you move on higher front here and take off the recent highs in around 3,866, we can then be looking up towards 3,900. Any move to the downside might find some support in around 3,800. A move below that could take us back down towards the mid-junery lows in around 3,749. And if you go below that, back down towards the blue line here, the 50-day moving average. As you can see here between the S&P 500, the Dow Jones and the DAX, and the FTSE as well, the first three are in quite clear strong upper trends. So is the FTSE. It comes off as recent one-to-one highs, but the markets are also in a strong, broader, upward trend. One of the tenets of Dow theory is that the averages must confirm each other. In that sense, it means that markets that are quite similar to each other, you would think we'll be moving in a similar direction. So if you're trading one of those big indices, it's worth your while keeping an eye out for all the other markets they're doing. Because if you're trading, for example, the S&P 500, and you notice that, and you think that you spotted a certain upward trend, if you're also seeing a similar price action on the Dow Jones and the DAX and the FTSE, you can then be more confident that the upward move in the S&P 500 is going to continue, but obviously there are no guarantees. Moving on to the big currency pairs, things have been pretty quiet on the currency front this morning, not much of a move in the U.S. dollar. We can see here that the recent highs that were achieved on the Euro dollar have been treated from those. Those recent highs, by the way, were about two and a half year high. So in a strong upward trend, America had a pullback. It's found nicely found support. The blue line here, the fifth and the eighth moving average, one spot, 21 or five. If you can hold above the fifth and the eighth moving average, it's likely that a broader upward trend is going to continue. Should we move higher from here? The recent highs of mid-January in around one spot, 22, 22. If you go beyond that, we can then be looking at retesting the recent two and a half year high that was set in early January in at one spot, 23, 49. And even if we do go below the fifth and the eighth moving average, we can see here it can be better. Even if we do drop below that, we could potentially look back down towards the early December lows in at one spot, 20, 58. And if you go below that, obviously going to 120 is going to be a big number to keep an eye for on Eurodollar. Taking a look now, what's going on with the pound first, the US dollar, similar situation whereby it wasn't that long ago. We were at the highest levels in about two and a half years on pound dollar. So the strong upward trend is still very much in play. Notice how there hasn't been a big correction or even much of a correction really on pound dollar like there was on Eurodollar. So this upward trend of higher highs and higher lows is still very much intact. If you press on higher from here, because we're currently trading around one spot, 3690, beginning move on higher from here, we could be looking at targeting one spot, 3792, which was the highest that was achieved in the week that commenced the 28th of April, 2018. To be honest, there isn't a huge amount of very clear and obvious either areas of support or resistance or even consolidation zones in this kind of general area. But if you do measure kind of press on higher from here, the kind of big level that people will be looking at will of course be 140, and then if you go beyond that, we'll be looking towards the highs of April, 2018. If you move to the downside in pound dollar, keep an eye out for this blue line here, a 50-day moving average in one spot 34, 67. Notice how on a few occasions in December, mid-December, and also in late December, it acted very nicely as support on a few occasions. Granted, it did trade, believe in both occasions, ever so slightly below a 50-day moving average, which that happens from time to time. There isn't always necessarily a kind of change right on the metric itself. But actually the nicest support on a complication in December, so keep an eye out for that metric should we have a decent pullback in the pound dollar. We talked there about Eurodollar, we talked there about pound dollar. Let's talk about the dollar itself. One of the markets we can look up, that we can offer here at CMC Markets is the Forex Indices. Working the same principle along a stock market index, both done across currencies. It can be found under our products. You'll see it here, Forex Indices. This is the list here. So we talked about Eurodollar. We talked about pound dollar. We talked about how both currency pairs have been a strong upper trend. So conversely, we've seen weakness in the US dollar. This here is the CMC US dollar index. So we can see here, it's been a kind of strong downward trend for quite some time. We have seen some signs, particularly from the first week of January onwards, that the dollar has been turning around. Could this be a case of the dollar has recovered some of its losses and it's going to turn over on itself yet again, like we saw here, for example, or like we saw here, for example. Or is it a case that the dollar is trying to actually shake off the broader negative trend and actually have a recoup a lot of ground and actually go into a reversal? If we do see a break higher of the recent highs here that we saw in around 958.12, or if we see that the highs on December 21 have been taken out around 963, if we see those that have been taken out, then we could begin to think, you know what, maybe there's going to be a broader correction in the dollar and therefore we could see downward pressure in euro dollar and pound dollar too. Lastly, I come onto the big indices after the big commodities of the day. We're talking there about gold. We're talking there about the dollar and its turnaround. Recently, the kind of inverse relationship between the U.S. dollar and gold, which trade in dollars has been quite strong. So if you're going to trade in gold, keep on what's been going on with the dollar. You've talked there about how it could be a potential pivot point for the dollar. Is the dollar recouping some of its losses before it turns lower again? Or is it going to be the beginning of a wider reversal? If it is the beginning of a wider reversal, it could put pressure on gold. If it is just a brief pull back before you move lower, and if you do move lower on the dollar, that could give gold a lift. But if you take a look, I think the candle that we saw here, only in the middle of the month, this circle candle here, and that's a potential to be a hammer formation. We've moved sharpies to the upside and the back of it. We've given up some of the ground. We're currently holding above the totally moving average, the red line here in 1846. If you can hold above that, it's likely that the kind of broad or upward trend of the last few months and also the kind of wider upward trend could continue. If you move higher from here, we could be looking at targeting the kind of 1900 mark. And if you go beyond 1900, we could then be looking at targeting the highs that were achieved at the beginning of the month, just shy of 1960. But if you do see a move to the, a fairly sharp move to the downside in pound dollar, keep an eye on the most recent lows of the month in 1840. And if you go below that, we could then be looking at targeting the lows that were seen in late November in its 1764. And lastly, let's take a look at what's going on at the oil market. We talked at the beginning of the video about lockdowns and the strategic concerns that we're going to have entrenched or harsh lockdowns remain for some time in Europe. In the last few days, we've have heard, we think of grumblings out of China that has been growing case numbers over there. China is the biggest importer of oil in the world. So demand for oil or the perception that demand for oil could be knocked by lockdowns could impact the oil market. So oil only in the middle of the month, we're not going to hit an 11 month high. So the market's in quite a strong position. It's been trading sideways recently. It's, you know, you haven't hit any higher highs. One or two kind of lower, you know, one or two lows. So the buy seems to be ever so slight to the downside. But keep in mind, we've been in a strong upper trend for months now. So even if we do move to the downside, we could head back down towards the $52 area. So it's also consolidation around there. We can head back down towards the blue line, the 50 moving average in its $50 and 66 cents. You can see how it actually nicely has both resistance and support but if the broader uptrend in break food oil does continue, because we're currently trading around $55.80, $85. If the broader trend continues, let's be kind of like a large number to look out for will be $60 or a barrel. That's all from this video. Thank you for listening. Have a good training week and good luck.