 Good morning and welcome to the weekly market update with me David Madden Today's date is Monday the 24th of August 2020 and the time has just gone 1142 British summertime and it's been a fairly positive start to the European training session We've more than recouped that the the ground that European stocks lost at the back end of last week We had some pretty disappointing Manufacturing and services figures from France the numbers from Germany were a bit mixed They weren't amazing either so that prompted fears in Europe that and in the Eurozone in content Europe That that the the odds of a V shape recovery are looking are looking lower That there is a cooling off in economic economic activity Which kind of spark fears that maybe we've had a fairly sharp rebound from the economy has been reopened But now it could be tapering off But in the last 48 hours in the last few days, we've heard from President Trump Who's who's considering fast-tracking a drug which is which has been Developed by the University of Oxford and AstraZeneca and the drug in question has a bit is is the potential to be a COVID-19 vaccine So the US the US leader is looking at potentially fast-tracking this drug for approval That should that be the case. You'd be looking at doing that in October keep in mind President Trump is running for re-election in November. So excuse me There's clearly a political play Here whereby he wants to kind of see him that isn't isn't he's in control in charge He's in control of the health crisis. So he's clearly looking to actually Try and do whatever he can to kind of go into that election Saying that basically he's in charge and not COVID-19 For those of you who follow these videos regularly as the usual do the usual rundown We'll start off looking at the week ahead Then I look at a few of the major markets indices currencies and commodities. So first things first Let's take a quick look at what's going on on the other week ahead If you're going to see some markets calm under in under insights You can find it under news and analysis We can see we can see it right here at the week ahead Starting off this this week's is US GDP WPP HP road Royce. They're the big ones So tomorrow we have second quarter figures out from Best Buy Tomorrow we have second quarter German GDP and we also have the IFO Indicator coming out as well on Wednesday second quarter numbers from Williams Sonoma Thursday Hewlett Packard HP have a third a third quarter results out One of the bigger ones to watch this week as far as the UK is concerned Rolls Royce They've been kind of struggling recently. They've had engine couple They've had issues with a couple of their of their engines and on top of that The aviation sector has been really hit hard because of COVID-19 and therefore demand for engines As it has really taken it taking a knock We have the Jackson Hole Symposium at the back end of the week starting on Thursday We also have second quarter US GDP on Thursday What's become very important the last few months the US weekly jobless claims We on Thursday, we also have first-time figures from WPP the advertising giant Let's see what they're doing in terms of Abilities to gain revenue because the likes of Google and Co have become and Facebook have become very strong at snapping up revenue away from our traditional Advertising agencies such as WPP and we have US personal spending and income from the from from the US I'll add the at the back end of the week Turning our attention now to the to the major industry starting off with the FTSE 100 The broad trend of the last few months has been that we've got a decent move from the upside from late March into Into June but since then we've been trading sideways It's kind of being a bit directionless This is old here. It's going to fail to get above 6342 but at the same time we are back above the kind of psychology important 6,000 mark. So If you look at the price action of today's candle is is is quite bullish So if we do good luck to kind of if you can continue to hold above 6,000 It's likely we could see it retesting this blue line The 50 moving average and that comes into play at 6154 Notice how on a few occasions recently that metric acted nicely as resistance So if the metric has been important in the past it makes it more likely it'll be important in the future Although there are no guarantees So if you press on higher beyond that I will go beyond say 6200 we can then be looking at retesting the mid-August highs this area here And we'd really need to be getting above this zone here I mentioned a moment ago 6342 6342 that's general area. It's a struggle to get above the metric Basically if I'm from June late June onwards So we really need to kind of get above that to then become more confident that the kind of the wider trend for the last few months is in play Conversely if the market turns over on itself, and we do drop back below 6,000 we could then be looking at heading back down forward This is over down around here the lows of early August in around 5852 and if you go beyond that we could be heading down toward this zone here in it 5800 take a look what's going on over in Germany So German market has been it's been a solid upper trend the last few months It's been in better shape than the first 200 because notice how the lows that were achieved in late July We're still well above the lows that were achieved in June And even though the highs of August have yet to take out the highs of July yet We've had a fairly decent move today and today's candle is looking quite. This is quite a bullish move We're seeing so far. We're not too far away from the highs of the middle of August So if you press on higher from here, and we and we Take out the highs of mid-August We can then be heading up heading up towards the highs of late July And if you go beyond that metric, you know, we then be looking at levels last seen at the back end of February Essentially what kind of really when the kind of crisis began so we could be looking heading up towards summer in the region of 13,500 on the flip side if we do you see a pullback We could see support to commit the play from this blue line here the fifth day moving average, you know Once again, and you know, not too long ago. It acted nicely as support So keep an eye out for that area and that comes into play in around 12,673 and it's only really if you're going to take out the lows of early August in this zone here In around 12,515 there thereabouts. It's only really if you can head below that Could we could be thinking rent for a fairly size of a correction? I should that be the case We could look at retesting this red line here the two day moving average in that was just south of 12,200 but notice how the turning moving average acted nicely as support back in At the very end of July Turning our attention now to what's going on over in the US starting off with the Dow Jones The dollars in fairly decent shape where the dollars poised to open around 28,100 and 7175 180 there thereabouts It looks like the highs that you know the highs that we're going to be setting with the cash market gets trading It's going to take out the highs of August. So we are talking about levels last seen in February So give indication of how strong things are over in the US and if we're going to continue to press on higher from here We could be looking at heading back up towards in around, you know, 28,890 Levels last seen in very much, you know, the last second or say the third week of February Just as the kind of COVID-19 crisis was really setting in On the flip side, if you managed to kind of move a bit lower We could see fresh bars enter the fall because Let's face it, you know buying on the dip has been a pretty popular strategy the last number of months So if we do have a move to the downside Support could be found from this zone here that the lows of late last week in around 27,449 and if you go below that we could be looking heading back toward the Psychologically, you know big number of 27,000 and a move below that could take us back towards this blue line here The 50 moving average, you know on a few occasions acted nicely as support and the 50 moving average comes in the play at 26,650 Now the S&P 500 is set to post a new record So which seems crazy given what's going on the world, but the balls have really latched onto this fast track potential COVID-19 vaccine story. So, you know We've we're looking at setting a new all-time high, you know in terms of the futures market are pointed to a fresh record intraday high I once cash trading gets underway. So that'll give you an indication if all bullish sentiment is Even if you do have a pullback Support could be found in around 3400 and if you go below that in around this area here in around 3550 and a move below that could take us back down towards this zone here in around 3326 Take a look now. What's going on on the currency markets is starting off with euro dollar. So the dollar index has been in focus For all the wrong reasons recently It was too long ago The dollar index fell to its lowest level in over two years and conversely euro dollar Which makes up a large portion of the dollar index hit its highest level in over two years So we can see that euro dollar has been a nice upper trend the last few months this high that was achieved Only well nearly a week ago was basically that Was um, I believe it was a 20 27 month high. So highest level in over two years It's still very much in the upward trend Although has been you know edging but lower the last few sessions is still in this upward trend And notice how in from august the lows that we've seen in august are getting higher So even though we're making a huge amount of progress at retesting the recent highs The lows are getting higher. So the biases that are the upside So I'll be press on higher from here because we're currently in around one spot 1832 We could be looking at targeting 120 And even if you do drift a bit lower support could be found from this zone here in around one spot 1696 And a drop below that could could see support in around the one spot 16 area And if you head south of that we could make a testing retesting rather The blue line here the fifth of the moving average Which actually has support Yeah in in late may the fifth of the moving average comes into play and at one spot 1532 So the pound has also done pretty well versus the u.s. Dollar in recent months because the dollar weakness As to that as well as zero, but it's still doing pretty well So it's been a nice upward trend. It was only last week. We saw the pound dollar at its highest level Since january this year. So that'll give you an indication of how strong things are in relation to pound dollar We're still on the upward trend to be fair Kind of a range bound the last few sessions But the bias still remains to the upside while we hold above this area here in at one spot 30 So if I do head back up we move higher from here and we can retake the 132 area We could then be looking at targeting this level here the highs of late december in at one spot at 3284 A move at the downside might find support in this zone in at one spot 30 Uh, and if you head below head below that we could be looking at heading back down towards the kind of 128 area Coming on to modern days now. Let's take a look at gold Uh, it's had a good run the last, uh, well, it's seen a lot of volatility in the month of august Um, but if you take a look at the price action It's powering ahead for months and months One of the reasons for this was the the weakness in the u.s. Dollar, which he just Discussed a moment ago in addition to that all the exceptional You know stimulus packages and easing from central banks around the world has put huge pressure on government bond deals Some of those government bond yields are exceptionally low. Others are in negative territory Uh, so some investors who would ordinarily be plowing their money into government bonds think, you know What if I want to avoid, uh, a very low yield or even negative yields? So my portion funds into gold Hence why we saw gold, uh, only at the beginning of this month hit an all-time high So we obviously seen quite a bit of volatility since then, but you know, we're still comfortably above 1900 because we're currently trading around 1950. We're still well above the lows of the middle of august Uh, so the the wider upper trend is still very much intact So if you press on higher from here, we could be looking at targeting this this area here in around $2,000 and if you if you want to if you do take out $2,000 traders will then be set setting their attention on the recent all-time highs If on the flip side, uh, we do could have moved lower from here We could be looking at heading back towards 1900 and if you go below that we could be looking at Heading back toward this zone here In around 1863 and notice how not only on a few occasions did 1863 itself Act of support, particularly the lows of mid august That price also coincides with the 50 day moving average which acted nicely as support on a few occasions in june So when you have a price point that is kind of from that from from more than one point of view Has been important recently it makes that even more boring because some people who follow the moving averages Some people you follow recent lows kind of converge on each other Uh, so that so if we do have a move to the downside, this could be a fairly significant area And lastly, I'll take a look at the oil market spring crude oil the october contract To be honest always been reasonably boring the last you know the last few weeks It's had a great recovery from late from late April uh until early august when it is when it's at its highest level since march. So we're talking About a five month high was achieved Not that long ago only at the beginning of the month or the kind of the middle of the month beginning of the month Was been trading in a reasonably small range ever since then We've had a few moves to the downside for example on friday with sentiment across the board was negative But we've covered some of those losses So the bias still remains to the upside and if you can impress on higher from here We could be looking at retesting the highs of august and if you go beyond that We could then be looking at targeting the lows of late march. Obviously we had the brutal gap down And the first week in march Uh, if we do managed to move a bit lower from here Support could be found in this blue line the 50 moving average of $43 and 46 cents And if you head below that we could be likely heading down towards the uh, the late The lows of late july this area here in a 41 spot 72 And if you go below that we could be like heading back down towards the you know, psychology important 40 bucks per barrel That's all for me this week. Thank you for listening. Stay safe. Have a good trading week and good luck