 Good morning and welcome to the weekly market update with me David Madden. Today's date is Monday the 18th of January 2021 and the time has just gone 1117 GMT and it's been a fairly muted and quiet start to the European trading session Not too dissimilar to what we saw at the back end of last week At the back of the last week, we heard from President-elect Joe Biden who announced the 1.9 trillion dollar coronavirus relief package To kind of reinvigorate the US economy now that was that was basically the talk of the town for the past couple of weeks About a week and a half ago. We saw multi-month highs or even old-time highs racked up on global stock markets in anticipation of the announcement from Richard Biden, which was delivered Back at the very back in the last week. And now that that's out of the way traders are kind of a bit more are a bit more Downbeat not overly aggressive it's just a bit more downbeat because Everyone was looking forward to the big announcement the big announcement has come and gone and now people are looking around going what's next on the horizon and For the time being there's nothing really overtly sticking out as oh, this is the next big positive thing That's going to kind of push markets along Pitchfairs are looking around to go on with a health crisis many countries around the world many European nations and others are dealing with a Kind of worsening health crisis. There are concerns that we're going that we're going to have an extension or an addition to tougher Lockdowns in very different countries around the world top of that. There are you know supply Constraint issues in relation to the bony out of the vaccine In terms of the speed of which that's going to be delivered. But that being said If you're in Europe are mixed the word a bit lower this morning than I was small bit higher it's almost like Traders know full well the health crisis an issue the vaccination process is going to be slow Governments at the same standard banks have a long history of Troy money at the problem So that's the rest we're not seeing aggressive sell-offs or to see this kind of sort of some subdued subdued mood So and on top of that to volatility for the rest of today's session all across Europe and Modernities and currencies is likely to be quite low because the US is on holidays today The US was celebrating Dr. Martin Dr. Martin Luther King junior day today So volatility is probably going to be quite low across the board. Now what I'll do is as always I'll run through the major the week ahead the major economic and corporate stories of the week and then take a look at the big Indices currency pairs and quantities So the weekend article can be found on our website see them soon markets calm under insights under Under insights in the from their latest news and analysis First of all that we had well announced overnight We had some mixed figures out of China the Q4 growth numbers Were better than expected and they showed an improvement on the previous update But the retail sales are not only the only that emits economist forecast It also the client also declare on the previous update So it seems to me that a lot of the growth been driven out of China is driven by the fact that Huge a large number of the kind of Commercial sector in China is controlled or influenced by the Beijing authorities So we have seen trial manufacturing or industrial numbers out of China It's likely that that has been driven by the state control businesses or state influence businesses whereas retail sales is all about private individual and There hasn't still hasn't yet returned to the levels we saw this time last year or so That's something to watch out for which could trickle true Back back which could trickle down to the sales of European brands which were to touch on in a bit Tomorrow we continue with the US reporting season Goldman Sachs and Bank of America will afford corporate numbers out With a couple of in a few big US bank supporting at the back end the last week JV Morgan was wasn't was a was it was the Probably get the biggest biggest of the group what to watch out for in relation to US banks the the Reserves in relation to bad debts provision for bad debts. They seem to be rolling back on that So it does give There was impression that the money is set aside for the provision of bad debts because of the pandemic It now seems that things aren't is going to aren't is going to be as bad as initially projected So with see what's happening in relation to the release of reserves connected to potential credit losses Looking ahead fourth quarter numbers often Netflix been a very popular stock with full stock or particularly during lockdown especially now that further parts of the world are So essentially people are being essentially being Some you know advise to stay at home keep on I afford the rate at which it's Attracting new paid subscribers in both the US but also around the world So the international component will be quite important also keep them out for any production updates in relation to Netflix because some of them some of the lockdowns are likely to get an impact their programming schedule turns up turning out new content Burberry the Third important numbers coming out the UK based fashion house They have done quite well out of Asia in recent months prickly mainland China And this is what I mean about if he put a mainland China are going on spending a whole lot That's likely to have a trickle down impact on well-known Western luxury brands including Burberry Dixon's car phone they left you cute three numbers coming out on Wednesday. This will be this will be important because Let's face it items for home offices or even Christmas presents like an electronic goods I'd like it to be in high demand So keep them out for how that performed over the all of you know that time frame would include the all important Christmas period is a very popular shopping period as we know UK and Eurozone CPI numbers are going to be out on Wednesday That's going to give us a gauge for demand to be honest demand is relatively low But at the time being it's likely to remain low given the kind of lockdowns experienced all over Europe President-elect Joe Biden will be inaugurated as the US president on Wednesday keep an eye for any kind of Political rumblings or any kind of potential protest or potentially civil disturbances like you saw at the Capitol building Not too long ago, but I imagine that the US And Police forces and national guards and what have you are going to be out in full force Thursday We have this the European Peen European Central Bank interest rate decisions meeting highly unlikely. We're going to see any big changes because at the last meeting We had an update To the kind of bond buying scheme that was increased by five thousand trees by five hundred billion euros So the edit we had a change in policy last month. It's unlikely. We're going to see a change of policy this month Looking ahead to Friday, we're going to have the flash PMI updates out of Germany and France Covering you know manufacturing and services given it gives an indicator of how things how things fared out In the month of January in line of the lockdowns And we have an update from UK public public finances covering December I'm obviously related to national debt. How is that fared in light of what's going on with the extension? Referral and the very different schemes who support the economy during the during the lockdown and then lastly Keep an eye for UK retail sales covering the month of December. As I mentioned, it's a very important shopping month So tears will be looking at what was the man actually like in the month of December So turning our attention to the footsie 100 starting off as per usual I'll run to the big indices the big currency pairs and the big commodities. So the footsie 100 over a week ago Racked up a 10 month high but ever since then it has been drifting a bit lower But let's not forget the broader upper trend is still very much in intact And if you continue to kind of press on higher from here, the wider upper trend continues We could then be looking heading up towards the kind of the 7,000 mark because we're currently in around 6,731 and he pressed on higher from here And if we retake the highs of early March in at 6,891 Because then you can then be looking heading up towards 7,000 big psychological number for the footsie 100 If you do manage to drift a bit lower from here, you could see support coming into play in this blue line here They fit to the moving average in a 6,490 only if you notice how we saw that metric acted as both, you know Both support and resistance not that long ago and if a metric has been of importance in the past It makes it more likely it'll be of importance in the future, but there are no guarantees now One thing I do want to talk about on this particular chart is the long wick that was it that was On the candle from Thursday the 7th of January now I want to talk about it is a long week generally denotes in decision And we can see here that on Wednesday the 6th of January market at a very bullish candle pushed up very aggressively on the 7th It managed to push higher yet again But if you notice how there's a very long wick in the candle And if you notice that the the opening level of the candles quite similar to the closing level of the candle So it's not a massive surprise that We've a long week in this kind of here notes in decision We'll come to that's quite a bullish trend or both a recent bullish run that we drift a bit lower from here so sometimes This sort of this sort of candle that this sort of candle formation can appear On a chart and it is worth taking notice. So the logic of behind that is America is very bullish run It goes out to kind of eat out another in this case multi-month high that high is achieved But that the bi-elementum quickly fades not say that the market completely turns around But I'm the same that after seeing a long week like that some party surprise. We didn't see a drift to the downside So something to keep an eye out for when you're looking at charting in general Take a look at what's going on over in Germany on the backs So that acts in a similar situation Just over a week ago an all-time high so it's really very much in a bullish trend You can see there's been aggressive in moving higher since since late not since late October to move moving higher similar to what we saw in the footsie after the new Multi-month high was achieved in the footsie after the new all-time high was achieved on the decks we're drifting a bit lower But the upward trend still remains intact if you do press on higher from here We can be looking at retesting 14,000 big psychological number if you go beyond that We can then be looking at retesting the all-time high of in around 14,134 and if you go beyond that you then be in Uncharted territory and in Uncharted waters and traders will be looking out for levels like 13,000. I'm sorry 14,200 300 so on as the fourth any way to the downside on the decks could find support in this area here the lows of late January Over the set the side the lows and early January matter in around 13,565 And if you do go below that support to be found in this blue line here the fifth that it will be average in a 13,419 and similar scenario notice how that metric acts as both Resistance and support in the last few months and similar scenario if that area the metric has been has been Significant in the past it makes it more likely it'll be of importance in the future But once again, there are no guarantees The Dow Jones nothing on a go back down a threat racked off the fresh all-time high. So it's been pretty much a strong upward trend Index futures are trading today, but cash equities are not trading today, but ultimately the upper trend continues Professor fire from here. We could be looking at retesting 31,000 a movie on that could take us back up towards the all-time highs In around 31,254 and then if you go beyond that we could be looking towards 30 of the world's 31,300 up toward 31,500 to one and so forth Any callbacks in the in the in the Dow Jones could find support from this blue line here Fifthly moving average in a 30,095 and even if you go below that because they were like a heading back down for this this line here in around 29,460 won because notice how on a few occasions in late November and also in late December That zone access support. So keep an eye for that area. Should you have a 30 size of pullback in the Dow Jones? sticking with the US team taking a look at this girl the S&P 500 similar scenario an all-time high was racked up a Couple of Fridays ago about a week and a half ago The market has cool ever thought slightly since then, but the wider upper trend is very much in place you know we're currently S&P 500 is currently trading around 3768 move higher from here could take us back up towards 3800 and if you go beyond that we could then be looking at retesting the all-time highs in a 3832 any kind of pullbacks might find support from this blue line here the 50 moving average in a 3677 move below that could take us back down toward this zone here Which is in around 3600 and it's similar to what we saw in the Dow Jones the lows of late November and the lows of late December as well So keep an eye for 3600 should we see a fairly sizable Pullback on the S&P 500 Keep turning attention out what's going on currency markets First things first, I'll talk about the kind of the rebound in the in the US dollar One of some of the parts that we trade here seems to markets are forex indices. So the best ever simmer my simmers structure to stock market indices, but actually it is currencies that were That we're looking into so take a look at the CMC GBP CMC USD USD index. We can see here The broad trend in the US dollar has been at the downside, but we have seen a rebound Recently and we're not the point where traders are wondering is this just to pull back in the wider downward trend I will return over on ourselves yet again Or is it going to be is this going to be the turnaround? Which is the kind of first step in a broader recovery in the US dollar So remember all I talked about we saw that long Relatively long wick on the FTSE 100 when they hit a 10-month high notice how we saw here a long relatively long wick a longish wick on the US on the CMC US dollar index here So we've had it's moved to a new you know two and a half year long, you know new loads were achieved Then what do we see? We see a rebound. We have a pullback here. It seems to find support here We're moving higher yet again. So if we do move higher in the CMC USD index We could be looking at retesting the highs of late December and if you move beyond that We could then be looking at heading it towards the highs of early December Now so the theme I want to talk about here is that we've had dollar weakness We've had a dollar rebound how's that going to impact pound dollar and your dollars So for all these statements in a correction in the in the in the US dollar recently So conversely we've seen weakness in GBP USD Weakness in euro dollar as well. So I'll take a look at your dollar now On the flip side of the divide We have you know, we're at levels overseen about two and a half years ago in the in early January We've been moving lower since because of the rebound and in the dollar Let's not forget the broader uptrend is still in place But we're coming up to a very significant level because we're currently in at one spot 2072 We're not too far away from the fifth day moving averages blue line here Which is actually support back in November if you can hold above the fifth day moving average It's likely we could see the broader upward trend continue I should repeat the case we can head back towards one spot 22 And then we could be looking retesting the highs of early January in around one spot 2349 But if you do move below the fifth day moving average, which comes into play in at one spot 2072 We could then be head back down towards 120 one spot 20 next in a big psychological number And a move below that could take us back down toward this zone here the lows late November and early December in at one spot 1923 of general area Now turning our attention to pound dollar So pound dollar has been in a very strong upward trend the last few weeks and months In fact, it was only very recently that it hit Excuse me. It was only very recently it hit a fresh two and a half year high So the market's in a pretty strong upward trend And we're currently in at one spot training around one spot 35 53 if we continue to move on higher from here We could be looking at heading towards this general zone in around the highs of all of late August 2018 are in at one spot 37 1992 but also keep them. I afford the kind of the lows of February 2018 in around one spot 3712. So There hasn't you know, we saw a lot of volatility in this time frame here So there isn't a huge amount of kind of areas that really stand out So we could be looking at could be looking at the zone of one spot 3712 the lows of February 2018 We could also be looking up towards the highs of April 2018 in around one spot Sorry, the highs of late April 2018 in at one spot 3792, but ultimately These levels that zone is just potentially going to be a Possible stop-off point as the market moves in the direction of one spot 40 should be kind of broader upward trying to continue If we do see a pullback in pound dollar, you could see support to interplay from this blue line here Excuse me. The fifth and moving average in at one spot 34 17 and notice on a couple occasions only in December it acted nicely as support So keep an eye for that area and even if you go below that we couldn't find support The other line here the 100 movie average Just north of one spot 32 Coming up on two commodities starting off with gold we talked about the rebound in the US dollar and Gold like other commodities is traded in US dollars But the inverse relationship between gold and the dollar it has been particularly strong recently So we talked about the move lower India in the move higher the reason you can rebound in the US dollar. Well, it's not with surprise. We're seeing weakness in The gold market on the back of that so gold has been moving lower very recently This candle here is a potential along with the notes and decision the way things are shaping up given Given the shape of the body of us particularly if it closes near the high of the day Could be a sign of a hammer formation Which couldn't mean we could be in for a turn around in gold because it got close to 1800 It didn't quite get there. So the couple looking at rebounding back up towards the water They moved me average. It's the underlying year in a 1887 a movie on that particular towards 1900 and if you take a 1900 we could have potentially looked to kind of retest the highs of early January If you do that around managed to turn over on itself if you take out 1800 you could look at heading back down towards the lows of late November in around 1764 and if you go beyond that We could then be looking heading further back further down further losses could be on the agenda So if you take out Take out the lows of late November. We can then be like a heading back down towards the lows of late June in that 1747 Now last day coming up to Brent oil with the oil market Brent crude oil the cash market overall kind of bullish creating in the markets supply concerns has all connected in the factor in pushing up oil To basically an 11 month high levels last seen in February 2020 you have seen a bit of a drift lower in the overall market China concerns about certain Coming under lockdown Prolonged fears about the rate at which the lockdowns go last concerns as the COVID-19 vaccine isn't going to get rolled out quick enough That's going to chip the way up to man But also if you've come off a 11 month high better profit taking it's hardly a bit of a price So the broad end to the last few months has been at the upside We're currently trading just north of $55 a barrel But if the uptrend continues to will be keep an eye on the kind of the next big psychological number at 60 bucks a barrel If we do drip lower from here support could could go into play from the kind of general 52 zone $52 own no the sound just you will north of it up around 50-52 spot 43 Active as a resistance on the way up so a bit of consolidation in a certain price action take place in around 52 There they're about to make December and if you go below 52 You could find support in the blue line here 50 movie average. I could nicely support in mid November and also as resistance in October and if you go below that again We could be heading back down towards 46.81 the lows of early December That's all from this video. Thank you for listening. Have a good training week and good luck