 Hello and welcome to the Monday at market update with me Dave Madden Today's date is Monday the 8th of October and the time is just count 11.05 for the summertime We've had a major sell-off in European extra markets this morning for a couple of reasons First of all overnight out of China. We did have some positive Service figures of China overnight, but I was overshadowed by the fact that the Central Bank of China Caught the reserve requirement ratio for the fourth time this year And this sends out a quite a negative message essentially the the Chinese central bank are essentially stating that banks that operate in China need to Actually reduce the amount of cash they have in their Have reduced your cash position in relation to the size of the loans in a bid to actually boost economic growth Hopefully the idea would be for For Chinese banks to increase the rate of lending as we boost in the economy This can be seen as an expansionary expansionary policy But in a scenario like this where they're in a trade spat with the United States and their economy is slowing down It's seen as a sign of weakness and it also seen as a sign that they could be Digging themselves in for the long haul in terms of the trade spat with Washington DC So we saw a large sell-off in Asia overnight on the back of that It's also translated into a fairly sizable sell-off in here in Europe this morning Staking up Europe Italy remains to be in the news for all the wrong reasons The Italian government is kind of Appears that it's going to be at like it's going to be on a collision course with Brussels because the Italian government wants to increase its budget deficit I once actually increase spending as we've actually hopefully Re-invigorating the economy, but that is likely to lead to additional borrowing So the Italian economy already has a colossal amount of debt and they're potentially looking to increase To the amount to the amount of debt and that would actually and that's actually kind of shaking investor confidence Matteo Savini, one of the deputy prime ministers of Italy As confirmed that his own tension of taking Italy out of the Europe, but he has stated He has asked that rating agencies be fair when they deal with when they review Italy's Debt rating and the fact that he is going to state that suggests that he's a bit nervous himself So once again, it's seen as a sign of weakness. So we're seeing the usual uncertainty in the Italian Stock market and that's also creeping out to the wider eurozone and european equity markets So they're kind of the big stories and the big headlines For today Taking a look at the week ahead and the week ahead can be found on our platform Our website rather if you go to see if some markets calm and then under a news and analysis You will find the the latest week ahead article It's going to be quiet Relatively quiet for for the rest of today and tomorrow tuesday looking ahead to wednesday We have uk manufacturing and industrial production on thursday. We have full year figures from wate smith Also thursday, we have uscpi. This is probably one of the more important announcements of the week One kind of recent stories has been out of us is that bond yields are around rise in the united states There's increased speculation that the better reserve are going to continue down their path of economic Monetary tightening should we see a fairly decent inflation figure from the us It could it could add fuel to the fire or add weight to the argument that the federal reserve are going to continue down their path Of monetary tightening. It should that be the case. We could see you could continue higher Push higher in us government bond yields. You will see a push higher in the us us dollar itself should and an issue with us the rise in the us dollar is that could hurt Emerging market emergency market occurrences The south african round the indian rupee the track is here. These are all currencies which under pressure are rising us dollar and a potential rise in us government bond yields would potentially put further pressure on their already struggling economies That's also playing into the set up or seeing global equity markets Looking at also on thursday Walgreens boots alliance fourth quarter figures out of the united states We have on friday. We have trade figures out of china That's going to be of importance after after the reasons are laid out that the chinese economy is cooling On top of that they're locked in the trade war trade dispute with the united states and any signs that china has continues to have a large imbalance In terms of a trading trading imbalance with the u.s Who can only add fuel to the fire that donald trott may look to actually stop further tariffs on chinese imports And also last year and friday. We have third quarter figures from a couple of big wall street banks city group and jp morgan So i'll take a look now add a few a few the popular markets starting off the first 200 like i said, um the The european economy markets are firmly in the red today And the fussy is uh is no different uh sticking a look here at the price action fussy as we can see if the last few sessions the fussy has been Has been pretty much in a fairly steady decline Turning down here to the mac d indicator and mac to instagram as the market was the driving lower We can see a steady decline in positive momentum if that was actually momentum that she swung into negative territory So the downward move we're seeing the actual index has been confirmed by the steady Decline the positive momentum and now increase in negative momentum So we have to be more confident that the downward move is going to last in terms of actually the price action Notice how it's actually below this red line here the eternity moving average which comes to play at seven thousand 488 and while we remain south of that metric it's likely that the outlook is going to remain bearish Should we continue to drive lower from here? We could look at heading back down towards the mid early early kind of mid september lows In this area here, which comes to the play in around the seventh house in 220 region i should we go south of that we could really heading back down for this price here The kind of mid october low mid april low rather of seven thousand one hundred and eighty eight Move to the upside. They could run into resistance at this red line here the eternity moving average and should we go beyond that? Take out this high here in this in this september seven thousand five hundred and fifty eight We go beyond this area here We could be making any backup for this yellow line here the wordy moving average at seven thousand five hundred and eighty seven Take a look at what's going on over in germany the decks Like i'll say it's a pretty big Set off across the board in europe take a look At the price action since june if you draw a Tread line from the highs of june through the lows of july and also to the low Sorry to the highs of apologies to the highs from the highs of june to the highs of july To the highs of september we can see it is a fairly Very decent Trendline resistance coming to play here Notice how actually the pushback and the rally we saw in late oz Didn't even actually get quite as high after that. I'm trying by myself But it has acted at resistance on a couple occasions recently in in in late september As we have a classic series of lower lower highs and now the market is pushing lower yet again We're at the level Level this morning i've not seen since Mid september if you continue to press on lower from here, we could be looking retesting this area here This the the low from The 11th of september 11 11,863 should we go south of that or they should be looking printing multi multi lows At the next area to keep an eye for for that will be this area here Level kind of in in the Just the south of 11,711,692 this area here notice how at the start of the year This region did act as support to keep an eye for this area As you would see any further move to the downside if you do see any kind of pullbacks about pushes higher About bounce backs rather in the backs resistance may come into play In around this area here at 12,250 so a bit of consolidation in right there But we really would need to kind of break north of this trend line here Which comes into play in around the 12,350 odd region and in order to kind of snap out of this down our trend We really can need to have a fairly size of break above these highs here which come into play Which come into play at 12,450 12,460 as you can see here because if you do continue to push lower here We have a series of lower highs we could be looking at a series of lower lows again So for the time being While we remain south of this trend line, it's likely that that outlook is going to remain negative for the DAX Taking a look what's going on over in the US It is worth noting that today is Columbus Day in the US So markets are open, but we may see a lower volatility We may see a lower trading volume Some some traders and investors may be taking a day's holidays today But as I said, the new stock exchange is open for business today So take a look at the DAO Jones here The market has retreated from its all-time high and it's actually the last few sessions been in the red We've been pushing lower We can see here on the MACD indicator of MACD Instagram that momentum has turned negative and that's actually increasing So the steady increase in negative momentum. So the momentum is with the siders with the pairs The the increase in negative momentum confirms The downward move we're seeing in the actual market itself So we'd be more confident that this downward trend is going to move it's going to continue It's also we're pointing out, you know, we've seen major sell-off in Europe major sell-off major sell-off in Asia So the global sentiment for equity is quite negative But but because US equity is coming from a recent some of them an all-time high We could be looking at getting dry clothes themselves And if you do continue to push the door from there, we could really get back down towards this blue line here The fifth day moving average does she kind of basically coincides with the 26,000 mark at a big psychological number as well notice how it didn't act they'd managed to act nicely as support back in the middle of august and traders would be Could view that as a sign that it may act as a port again in the near term Just because a metric has acted as a kind of support or resistance in the past is not guaranteed that it will in future It just makes it a bit more likely that it could so If the if the sell-off ended in the doll continues in the near term, we could see You know heading back down towards the 26,000 mark given that sentiment is is quite negative But the doll may find it difficult to kind of Kick back into the kind of wider upward trend that has been in place But if you do buy a portion higher from here, we could be looking kind of heading back up towards the recent high Just kind of shy of the 27,000 area Um, take a look now what's going on in the gold market Gold continues to be fairly uninteresting to be perfectly honest it gives dancing around the kind of 1200 mark Uh gold has been in a classic downward trend since april So you've got a lower low lower high lower low lower high lower low. We've had had a reasonably decent Bounce back since this is mid august But hasn't really kind of managed to kind of gain much ground That hasn't really spent much time away from the 1200 mark volatility It's been quite low I mean that that actually you can see in the us doll become stronger We could see you can afford to get downward pressure on the us on the on the gold market Essentially ultimately why we remain below this area here the kind of 12 14 region Why we remain south of that It's likely that that the outlook for gold is going to remain negative And if you do continue to kind of if you do continue to kind of drive further south of 1200 We could really kind of back down towards this area here the recent low 1180 I should go south of 1180 We could be like any back down towards the august low of 1160 Any moves to the upside if you do see a break north of 12 14 They keep coming up for this region here Which comes into play at 12 36 Um sticking with the commodities theme. Let's have a look at what's going on in brain crude oil Brain crude oil not too long ago was that fresh This essentially a four year high which is uh, this, um, which was only uh last last week here We have seen some some some moves from the ground being handed back In the in the in the brain crude oil market, but it still is very much in an upward trend I think kind of pushing higher steadily Uh since mid up mid august So we're still very much in an upward trend If you do you could see if you do continue to actually kind of push lower in the near term We're good like heading back down towards 80 to 50 region this area here And if you go south of that we could be looking back down towards this price here of 80 spot 89 I think or south of that you could be looking any back down towards 80 80 dollars per barrel Um, if we do actually look to resume the kind of wider upward trend that we've actually been in We could be looking heading back up towards 85 dollars a barrel and then near kind of 80s f mark Which which was the just just that just shy of 87 Was the recent high and if you go beyond that would they be looking at printing fresh Essentially four year highs and then tears will be looking out for 88 dollars a barrel And it's a lot of talk of 90 and 100 dollar 100 dollar 100 dollars a barrel target for uh for Brent crude Take a look at WTI. It's also at a at a fairly good one WTI But as you can see here, we have also had a fairly decent sell-off and in recent sessions Taking a look at this particular candle here on the daily chart from from last thursday thursday the fourth of october This candle here, uh, it appears to be a bearish and gulfy notice how effectively the body of the candle here effectively Is that completely engulfs the previous day's candle do you refer for a textbook for a textbook for a textbook example of a Liberation gulfing it would be nicer. Um, if the body of the candle was a bit taller, I should completely, you know, uh engulfed high The uh, apologies completely engulfed the at the close of the previous, um of the previous candle But nonetheless, it's still It's still it could potentially be construed as a bearish and gulfy So we could see further declines in the near term for wti and if you do like to drift to drift further south in wti We could be like heading back down for this area here this line here at 72 spot 79 And if you go below that you could be like heading back down towards this line here in around the 71 spot 69 And if you look to kind of resume the kind of wider upper trend that's been in play for wti We could really get it back up towards 75 and up towards the recent high of just north of 77 And then if you go beyond that we then became a printing fresh multi-year highs and just looking now for 78 and up towards $80 then Take a look now. What's going on in the currency markets Europe versus the US dollar so that so the wider trend has been very visually negative for euro versus the US dollar in the last number of months, but we did see decent enough bounce back in august But that bounce back is actually being called into question because it has measured but fairly size of move higher If pull back here to a reaction low is pushed higher here again Paying a fresh multi multi-week high in late september But we have been drifting lower and most of the lows here managed to actually take out the recent Because of the lows in early to kind of mid september So we keep looking at falling back into the wider downward trend that's been in play for a number of months As I said, a lot of speculation at the Fed reserve are going to be Going to continue down the path of hiking interest rates So this is very much a dollar buy story that I mentioned that some of the economic indicators of the eurozone has been a bit weak Adding to that political uncertainty strongly Italy as well If we do continue to kind of push on lower and while we remain south of this area this this line here In a kind of one spot 15 10 or one spot 15 while we remain south of that level here We could actually head it back down towards the kind of 1 13 mark If you do you have a decent rally north of the kind of 115 or 115 10 We could look heading back up towards this yellow line here the one or the moving average Notice how it acts as one can support and resistance in in recent weeks And that that metric comes to the play at one spot 16 34 and if we go beyond that we can make a backup towards Once once one spot kind of 17 50 I think I'll be on that we can make a backup towards one spot 18 51 and ultimately while we're you know, we really need to be to move and be a beyond One spot 18 50 or 51 to actually be kind of be more confident that the upward trend is going to continue I'll ask but at least turning our attention now to pound versus the US dollar Similar situation and pound dollar has been in very much downward wider downwards trend since august Apologies since april, but since august we've had a fairly decent bounce back has been a bit That's kind of a being a bit choppy but broadly speaking We've seen kind of moves higher in the power versus us dollar since august so we could be looking kind of changing a bit of a comeback On the power versus the US dollar And ultimately while we remain north of the kind of 130 mark become a psychological number and also 130 is comfortably above This blue line here the 50 moving average while we remain north of that It's likely that we could actually get in the near term see positive outlook for the pound dollar and if you do continue to press on higher from here We could be looking any back towards the kind of late september high of this shy of 133 and if we go beyond that we could be looking any back up towards the early july high of of a one spot 33 61 and if you go beyond that we could be like any back up towards The early june high of one spot 34 72 But if the market does kind of turn over let's ask again It does have a decent break below 130 we could 130 we could be looking any back down towards this area here that early Early september low of one spot 28 95. I'm a break below that could bring the The early the the previous early september low at one spot 27 85 into play Just a couple things to show you on our trading on our trading platform Market insights, which is this this tab at displayed here some of the updates that we do in terms of RIT reports gets updated to insights. This video is going to be on insight Also, it is worth it is worth pointing out that From today, uh, very economic announcements get posted the insight that can be found under a market pulse, which is On the second option here and also keep an eye on chart form, which is this this tab here Chart form is the under market pulse once again And it's a third option down and what chart form is it's essentially a snapshot of a market I'm actually some analysis on the side of it as well And that that is updated by myself and my colleagues here at CMC markets But it's also accessible for us. She clients any any any if you want to take a screenshot of a particular chart Or write a few words on what you think the price action is going to do We can actually begin a conversation from there If you have any comments on this video or any of the other videos that we have produced here at CMC markets Please feel free to leave a review on google reviews. Uh, and that's all for me this week. Thank you very much