 Okay, good afternoon. Welcome to this week's, or this month's monthly webinar with me, Michael Houston and my colleague, Colin Zizinski, where hopefully Colin will be joining us later. He's having a few technical problems. Otherwise, it'll just be me. And I'm going to start looking at the fully fed if this is bad. And it's not bad actually, 8.3. Better than expected. Slightly flies in the face of the very poor empire manufacturing number that we saw earlier this week. And as a result, as it's a positive dollar number, we've got a little bit of a push higher in the dollar yen. July existing home sales have risen 2%. We're expecting a decline of 1.1%. So again, slightly dollar positive. But again, we can see that the result is fairly short lived. Right, so now that we've done that, I can quickly take you through the disclaimer, which I'm bound to do for compliance and legal reasons. So if you could just basically cast your eyes over that and generally take that in, I will quickly skip through them. And then we'll try and move forward. And hopefully Colin will be able to join us later. Notwithstanding the fact that Colin actually can't get into the webinar at the moment, we were going to be talking about obviously last night's FOMC minutes. The fact that they were, how should we say, slightly less hawkish than was expected. Everyone had placed great emphasis on the fact that the Federal Reserve, in the Federal Reserve statement, the word more had been placed in front of the improvement in the labor markets. But what they didn't focus on was the fact that the paragraph, which related to the stabilization and energy prices, had been removed in the July statement. And it was in the April statement, which suggested to me that the Federal Reserve were more concerned about inflation than they were actually letting on. And that does appear to have turned out to be the case because if we look at what the minutes said, the Fed said they had concerns not only about the low rate of inflation, they also had concerns about the strength of the US dollar and events in China. And that was on July the 29th. Since then, obviously we've had the Chinese revaluation of the NIMBY. We've also had an additional decline in crude oil prices. And a whole host of other asset commodity prices have come quite significantly lower. So what does that mean for expectations about Fed rate rise? Well, regular viewers or listeners of these webinars will already know that I don't think the Fed is going to raise rates in September and have felt that way pretty much for the last six months. These minutes basically just reinforce that narrative for me. And it's certainly being reflected in some of the currency pairs that we're seeing some of the dollar weaknesses that we're seeing play out at the moment. Unfortunately, we're not seeing anything significant in terms of breakouts. But I think this is significantly important What we've had here is this Chinese revaluation has thrown into stark relief. What or how closely correlated the euro and the Chinese RIM NIMBY have been, because if we look at Euro dollar and we look at the Euro RIM NIMBY over the course of the last 18 to 20 months, the blue line is Euro dollar and the black line here is the Chinese RIM NIMBY against the Euro. And we can see here that we've broken above the peaks that we saw in May and June with respect to the Euro Chinese RIM NIMBY, which suggests that we're going to see further Chinese RIM NIMBY depreciation and Euro strength. So what does that mean? It can mean one of two things. It can either mean further dollar strength against the RIM NIMBY or further Euro strength against the RIM NIMBY. And certainly the pullback that we saw in Euro dollar over the past couple of days has reflected that. But we haven't actually been able to close back below the previous resistance, which now acts as support. So what do we face with going forward? For me, this can mean one of two things. We can either see a significant rise in the dollar against the RIM NIMBY. It doesn't seem likely. Or we can see a rise in the Euro against the RIM NIMBY, which is probably more probable if you buy into the narrative that the Fed may not be able to raise rates in September even if they want to. And we're certainly seeing that played out in terms of dollar weakness with respect to the gold price. If we look at the gold price, and we can see that from this chart here. This is one I saved earlier. This was the original breakout point lower that we saw from the October lows and the February March lows earlier this year. What we've done now is we've actually managed to get back above this previous support level, which is now resistance. And if we can push on towards this trend line from the 2015 highs, we can certainly start to edge ever so slightly higher. Certainly looking at the gains of the last two days, we can certainly see that there's potential for further gold strength and further dollar weakness. What's worrying me a little bit about this particular chart is we're now starting to become a little bit overbought. So there is a concern that maybe we could run into a little bit of resistance around about 1165, 1170. And then of course you've got the 200 day moving average. So we're still in the gold downtrend, but certainly in terms of pairing expectations about a Fed rate hike, the expectations now, people are starting to pair back on the dollar long positions, their gold short positions, their euro short positions, their cable short positions, though the sterling dollar trade is slightly different in the context of the fact that the Bank of England is not expected to ease monetary policy further, unlike the ECB, unlike the Bank of Japan. So the pound is going to get slightly more of a bid than say for example the euro or the yen simply because of the fact there is an expectation that the next move in monetary policy with respect to the Bank of England is likely to be a nudge upwards in interest rates as opposed to further easing. So the cable trade or the cable trade dynamic does have a slightly different slant to it. If I was going to go short dollars and longer currency, I'd probably want to go long sterling as opposed to long euros. Be that as it may, the euro dollar at the moment continues to trade in this but this range that we've been in since April-May and the bottom of that range currently comes in around about 108.20. At the moment we've got significant resistance at 112. The likelihood is that if we get a break above 112.20 and I can draw that line in through there there, there it goes fairly straightforward, 112.15, 112.16. We can see straight away that there's a significant area of resistance at that level and if you're short euro dollars or if you're short euro dollar where would you put your stop loss? What you do is you put it above these two peaks here, the July peaks and so far the peaks this month. So 112.15, 112.20, bearing in mind we've got the 200-day moving average just above it but certainly I think what could happen is if 112.25.30 gets dealt then we could certainly get a move back to around about 113, 113.40 and obviously the previous peaks that we saw in May around about 114.65. What I don't expect to see is a significant strong rebound in euro dollar but I think there's a good chance we could well see 160 cable over the course of the next few weeks. Just have to wait and see how this particular trade plays out. If we drill down into the four hour chart we can see once again certainly through here how this market has range traded over the course of the past month or so. Good selling interest at 112.20, around about 112. Good buying interest around about 108.108.20 and a little bit of what I would call congestion in the 109.80s, 110.20 area suggesting that it could go one way or the other. Now while I'm talking here ladies and gents what I would welcome actually if you have any questions about a particular currency pair or a particular product that you would like my view on obviously I can't tell you where to buy and sell it that just wouldn't do and besides I'd get into an awful lot of trouble with my compliance department even if I did so but that being said I think you know this webinar is it's about you just as much as it's about me talking to you about the markets and I certainly think going forward there's still going to be continued speculation about what the Federal Reserve might do going forward. What I would also say is that we also need to pay a significant amount of attention more than anything is to the fact we need to pay significant attention to next week's Jackson Hole symposium, the annual symposium, central banks symposium with respect to any sort of narrative that comes out of there with respect to what to expect about monetary policy in September. I don't think it's going to be significantly important simply because Janet Yellen, the Fed Chief, is not going to be there and if you factor that in then maybe there's a good chance it could be a complete damped squib. But what I would say is that it's certainly extremely important in the context of tone and the fact of the matter is it's all about inflation, monetary policy and inflation dynamics which is somewhat topical given the current debate and speculation about a Fed rate rise in September. So any questions I'm just going to type in need to be put over the chat facility. So if you just reply to any of the questions, any questions that you have from there and then you can either ask me your question privately or you can basically throw it open to everybody else. So we'll move on to the pound against the dollar. I've identified the key resistance areas there. We can see with the four hour chart on the pound against the dollar here we've broken above the range highs that we've been in for quite some time earlier this week but we haven't really been able to follow through with any significant momentum to the upside. That doesn't necessarily mean that we're not going to carry on going higher in the short to medium term but I certainly think there's a risk that we could come back here to around about 155.80. 155.80 is probably fairly important support level given that that was the initial launching pad for the rally that we saw on Tuesday in the wake of those slightly more robust inflation numbers, the core inflation numbers, the jumping core, UK core inflation from 0.8% to 1.2. I still think that despite that jump in UK inflation the prospect of a rate hike in 2015 for the UK still remains a very much an outlying and outside possibility given the weakness of the retail sales numbers that we saw this morning. They weren't necessarily bad but they weren't particularly good either. We were certainly expecting a much better performance from UK retail sales than what we actually got. If you factor out auto and fuel we actually only saw a rise of 0.1% and we're expecting a rise of 0.4% and you know as such for me I'm just going to sorry I'm in the process of trying to do something here. I'm being asked to promote Colin as a panelist because he's on as an attendee and I actually don't know how to do that Colin. That's going to be a bit of a problem so what I would suggest you do Colin is that we'll give this one a miss and we'll try and find out why we had the problem and we'll revisit it later because what I don't want to do is start messing around with the settings and run the risk of actually cutting you off or cutting everyone else off at the same time because let me just let me just try it. Let's see what I can do. Now where's it gone? Bear with me ladies and gents while I try and promote Colin to a panelist. I'm trying to do that now. I've done that Colin but I don't know whether I can't hear you so I'm not sure how that's going to help me or help you for that matter so I've promoted you as a panelist now I guess you just need to do oh here we go hang on. Can you hear me? I can, loud and clear, brilliant. Fantastic, sorry everyone about this. We had a technical problem earlier with my login I'm not sure why. I think the technical problem was you mate. Anyway let's move on so you've heard the conversation so far Colin. Is there anything you want to expand upon with respect to what we've already covered? No let's just keep on going. Okay right so I've just been asked to run us through the footsie 100 and the DAX so more than happy to do that we'll start with the footsie 100. Certainly that is starting to look a little bit oversold and I think there's a good chance that we're probably going to come back to the 6,300 level. What I want to see going forward is a move back above 6450 but while oil prices and commodity prices remain under pressure I think there's a definite chance that we're probably going to go back and revisit the December lows and those series of lows around about the 6,100 level. Now that may seem quite a long way away but in the context of where we've come from if you look at what the footsie 100 has done over the past say for example two or three years let's just zoom the chart out we're right on the 200 week moving average so certainly I think from where we are at the moment there is a prospect of a bit of a bounce back. Let's see what that value is. It's 6,347. Now on the two occasions on the few occasions that we have broken below it since 2012 we've gone and overshot it by about in this case below there 6070 by about 60 or 70 points on that particular week there and then also 6125 25 points through there so I certainly think on the weekly chart we're approaching a very very key support level so in the short term we can probably see a little bit more downside towards 6,300 which coincides pretty much with these lows that we saw in January so a little bit more downside in the short term but to stabilise we need to get back above 6,450. You may have heard a little longer for a sec Michael in terms of daily year yeah yeah like that. Is that starting to look to me if you look at the that late November high the recent highs in the May that double top back in April and May that's almost starting to look like a head and shoulders to me or you mean yeah I see what you're saying there so if we blow it out to say for example a week yeah there you can see that they go all the way there okay right let's actually less it's a rounded top that's not looking very good at all it's not but it's also very oversold on the oscillator and on the stochastic let's open a secondary chart on that okay so now I'm going to open a monthly chart let's just keep that as a weekly let's do the real-time analysis here draw from the lows in 2009 yeah it's not quite there is it let's draw it from the lows in 2012 2011 rather get shot of that you've got to have a very sensitive you've got to have a very steady hand when you're drawing these in well what this is telling me is that we are at a very very key long-term support level 200 week moving average and also very close to the lows that we saw in January February around about 63 20 63 30 so you could argue this is around the top the only question I would have with respect to that is where is the where is the neckline and I'm not sure I mean would you draw it through those loads there Colin yeah it's hard to say in which case you did have a slightly flatter line and about there yeah you could use that as a channel bottom for sure and I've missed it this is why you need a steady hand so go again click on that and then go through there I mean basically what it's saying is there's certainly potential for more downside but I would certainly be keeping an eye on these current levels around about 63 63 20 63 30 and look for a bit of a rebound certainly if we look at the last two weeks we've seen a significant decline so we're due of bounds I would suggest we're well over due about question is do we get one I certainly think there's scope for one of these sorts of levels but what I want to what I would want to see is a move back above 6450 to suggest we get a bit of a rebound so that's the footsie think probably near a short-term base but overall the downtrend remains intact while we're below 6450 moving on to the DAX the DAX is still in pretty good shape for the year but we have broken the 200 day moving average and for those of you saw my video during earlier on earlier this week you'll know that I said that if we broke below the 200 day moving average the potential for further losses was very very high and I certainly think in terms of the DAX there's nothing now between 10,000 550 and 10,000 so we could go now the 450 points very very easily in the DAX and not even really break a sweat because let's face it this is where we were at the beginning of this year below 10,000 and we're still well above it so we're still showing some fairly good gains for the DAX we've broken the 200 day moving average and we've broken it quite significantly which would suggest to me that there's significant amount of momentum behind that move can we get a short squeeze most definitely yes we can but certainly this breakout here of this this very inelegant triangle it's not the most elegant of triangles I have to admit would appear to suggest that there's plenty more downside if we measure this move here from the low in July to the high down from the breakout point here which probably brings us to around about 10,100 give or take that all these peaks that we saw in December so if we basically draw a horizontal lining with respect to the peaks in December you're looking about 10,100 is your next area of support in the DAX because certainly if we look at between this line here and this line here there's not really that much there in terms of actual support and it's important that this this 10,000 level was very very important until we broke through it in the early part of this year it was a big big top we had one two three four five goes at it before we got through it so we can certainly test all the way back to it you know the first you 100 is much more difficult to call because pretty it's been pretty much trading sideways for the best best Parker two or three years the DAX has gone on the parabolic move higher got a little bit ahead of itself so probably needs to come back a little bit certainly to around about the 10,000 level before having a little bit of a rebound Michael on that could we before I have to jump could we take a look and contrast this with gold sure yeah I had a quick look at gold but we can go back and look at that most definitely I think that's where we're seeing now with the the currency starting to really fall away the the indices really starting to fall away like you look at the way the DAX had a early drop in the spring was kind of drifting and now it looks like the the bottom's getting ripped out from under it again and interestingly enough gold is looking like it's it's finally starting to capitalize on some of this all through the summer when we had all the the Greek stuff going on and gold didn't budge and and now we're starting to see this and funny enough now that Greece seems to be getting sorted out for now always the for now with Greece right but yeah because of elections I think I think suppresses rumored to have resigned or going to resign some point and any time all new elections yes so that could flare up anytime and then they've got to have another go at their debt in the in the fall but but certainly the way gold is is starting to take off is is quite something there it's and we'll see what happens when it gets up closer to that downtrend line but but between what's going on with China and the currencies and and and Greeks can come back around again and it seems to finally all be starting to catch up to stocks yeah going into the week time of the year for stocks as well yeah I also think you've got a factor in that we're probably going to get a bit more weakness in the Chinese currency which is going to compress or press down on the or inflation going forward and I think that is going to influence things you know if we look at the best performing emerging market currency last year or over the last 12 months it's been the Chinese renminbi and that can be certainly borne out by this chart that I've done overlaying the Chinese renminbi with dolly in so what we've got here fascinating because the renminbi was pegged to the dollar when the dollar went up so did the renminbi and it had a chilling effect on Chinese exports what we've got now is dolly in has basically continued to do nothing but the renminbi has weakened quite significantly the Chinese currency is weakened quite significantly and I would expect but if this correlation continues for this suddenly drop so that feeds into my no rate hike narrative I think dolly in could well drop very very sharply to the previous lows that we saw in July as it becomes slowly apparent the Fed's not going to raise in September and we could get a catch up here we've certainly got a significant lag in dolly in and that's a good job to exactly in Chinese and so you've got the bottom of that double top is a 120 and a half if you compare that to what I was showing earlier with the euro and the renminbi it's a similar sort of story the only difference is I'm going to do two charts here you look at these two this is the euro against the Chinese renminbi okay so if I draw that we broke out of that when we got the devaluation we've come back and retested it and now we're looking to go higher again so those saying earlier that can play itself out one of two ways this is 2014 the euro Chinese renminbi has broken higher euro dollar hasn't so I would expect one or two things to happen either the dollar appreciates against the renminbi or the euro shoots higher and the dollar weakens one of them is going to drive this move and I have a feeling it's probably going to be a weaker dollar could be wrong yeah we'll see what happens but I've been leaning towards that that we might get at the center or two in September but it's really getting hard to see how they're going to raise interest rates when everything else is crashing the other way exactly and if we look at dollar CAD this is something I wanted to show you guys earlier look at this dollar CAD chart this is a four hour chart we look as if we're building a top in dollar CAD if we look at the previous highs early this month around about 132 irrespective of what you think about oil prices and further weakness that certainly weighed on the Canadian dollar but whether they're $40 or $35 or $30 if the Fed doesn't raise rates do you think the Canada or the weaker oil price or the weaker dollar which will which way will the dollar CAD go given where we are at the moment it looks to me like there's still room for the dollar for the CAD to strengthen from here I think that the I still think with with oil back at 40 I mean I think we've got the 08 low near 35 but I think most of the decline we've seen from 60 to 40 is probably getting behind us now so if crude oil can stabilize in this 35 to 40 range there's room for for dollar CAD to come back around if the particularly and of course if the US dollar weekend could also underpin commodity prices as well well let's look at let's look at dollar CAD over the since May June last year okay it's quite interesting chart isn't it you could almost be looking at a crude oil chart upside down yeah absolutely it's very similar oh look at that so that's dollar CAD a little sideways consolidation between February and April or look April and May a slight lag on it we've got a little bit of a down move on WTI and certainly there's potential for us to go an awful lot lower we need to get back above WTI 42 dollars a barrel I think certainly in the case of this move here I mean you look at where we've come from since June that was the June meeting of the Fed okay $60 a barrel the July meeting was here $48 a barrel minutes $40 a barrel second a height Colin oh sorry I've got to jump Michael okay all right well I think everyone and sorry about the sorry about the delay this morning no worries great bye bye so so we are looking a little bit oversold on crude oil $40 a barrel will probably act as a little bit of support on the downside simply because it's a round number and generally markets tend to be a little bit superstitious when it comes to round numbers there's always you always tend to get a little bit of what I would call a little bit of aggregation of orders around a very very key level so if you're on crude oil you're going to put you're going to put buy orders around about 40 10 40 20 and stop losses around about 39 80 or 39 90 so certainly looking certainly looking at crude oil there there is potential for a little bit of a bounce but overall unless we get back above these three peaks here one two three which is the peaks of Tuesday and Monday and Tuesday of this week which is round about $43 a barrel then the direction of travel does suggest that we can go an awful lot lower now it is oversold but it's been oversold since July so certainly there's potential for us to carry on going lower and this just to stay exactly where it is go to a weekly chart it's also quite important in the context of the fact that we've broken below the previous lows here and if we change this to a monthly chart we can see straight away that really the next support is around about the 2008 lows which is around about $35 a barrel so this is just the last two months that's July the decline in oil that's August I mean that monthly chart is absolutely eye-wateringly significant in the context of what could happen to inflation over the course of the next few months there's a significant lag there's a significant lag effect involved in in basically price pressures filtering down and filtering through so I certainly think in that context we can certainly expect the Fed to stay on hold and monetary policy to stay fairly loose right so covered crude oil covered Brent Brent Brent's going to probably be a similar sort of story with respect to that is there anything else that you'd like me to cover ladies and gents before before before we sign this off well we haven't actually looked at U.S. stocks so I'll do that and we can see that we've been in a range on the S&P 500 for the past few months certainly since March certainly found quite a few lows around about 2035 2040 the clients of the last two days which seems to suggest the momentum is building up for a move lower but really I think the key level here is 2040 as well as support from the trend line lows from the December lows here but also if we take it all the way out we can see that we're also approaching a very key support line from the lows that we saw in 2011 but again you could argue this is also a little bit of what we could potentially be around at top so you can see straight away through here through 2015 how important this 2035 2040 area is in the context of the long-term trend one thing that does worry me about the S&P 500 and U.S. markets in general is that for the past two to three months the small cap index has actually shown significant amount of more weakness than the actual benchmarks itself the main benchmarks and we can see that played out here we are starting to break lower on the overall benchmarks on the small cap 2000 of the Russell 2000 and approaching a very very key long-term support level here so keep an eye on this particular chart here because if we bounce off this then we could well see a rebound in broader U.S. markets if we get down to these sorts of lows here which also coincides with the 2015 lows that we saw in early in early in early January which was round about this low here which is around about 1143 which is around about 43 points below where we are now Dow Jones US 30 similar sorts of story approaching a very key support level here 17,000 38 so again got a key support level it's worth keeping an eye on on a daily chart certainly look at we've also posted a little bit of a negative death cross on the on the US 30 not that much of an issue but we can also see how important this 17,000 level is in the context of these lows that we saw at the end of last year and the beginning of this year so we can see that US markets are also approaching some very key support levels in the short to medium term but when you actually look at where they come from you know people are obsessing about the fact that markets have fallen quite sharply in the past few weeks look at it through the prism of the last few years and you'll see that the falls that we've seen thus far are probably fairly minor in the broader scheme of things and I think that's important to put that into perspective as well let's go a quick look at the Aussie dollar it's always a bit of a bit of an old favorite and this chart starting to look at a little bit heavy certainly has been looking heavy for quite some time now finding a little bit of support just above 72 cents can draw that chart that line in there 72 30 let's bring the chart all the way out why did I draw that line in there yep 2008 lows is around about 16 and we've got these peaks here from the peaks at the end of 2008 which currently come in around about 71 40 so again the Aussie dollars starting to approach significantly important support levels so when you look at the dollar CAD commodity currency you look at the Aussie dollar commodity currency I think as long as we stay above the support level around about 72 30 the resistance level on dollar CAD at 132 I think there is some scope for a little bit of dollar weakness right any questions on anything that we've covered so far is there anything that you would like to ask me with respect to other markets can have a look at the Hong Kong 8 shares that's looking a little bit ugly which suggests that potentially we could see further declines there again now we have to keep an eye on some very very key support levels we've broken below one on the eight shares and certainly given the direction of travel of the market thus far we could well come back and revisit these lows here around about 10,000 we've broken below the lows of the that we saw in July by quite some distance and this is the offshore market that we're looking at here this is not the Shanghai market this is the Hong Kong China 8 shares index which I think essentially gives you a broader indication of sentiment with respect to China and its stock market than the onshore market which is very much manipulated by or has it is greater more influenced by the Chinese central bank Chinese central bank can't manipulate anywhere near as easily the Hong Kong markets as it can the Shanghai markets okay does anyone have any other questions over and above what we've already talked about just putting it out there with this question okay I'm guessing that no one has any questions gonna be posting this on YouTube in the next 24 hours so if you want to listen to it but if you want to listen to it back please feel free to do so otherwise I'd like to thank you all for attending and good luck good luck with your trading and I will speak to you all again on the non-farm payrolls webinar in September or my colleague Jasper hosts a webinar every Monday at 12 15 which you can sign up for from the education section on the CMC markets website okay I think we're all done so thank you very much for listening ladies and gents and have a good week