 Good morning and welcome to the weekly market update with me David Madden The days date is Monday the 5th of August 2019 and the time is just gone 1132 British summer time and we've had a major set off in European equity markets this morning essentially trade tensions Between the US and China have heightened again And that has led to major sell-off in global stock markets So we saw a large sell-off in Asia overnight Major sell-off in Europe this morning and we're calling the S&P 500 and the dial Jones down a consumer amount And so going to get the detail here of what's going on one of the one of the kind of Responses if you will from China in relation to Trump's latest move is that China has instructed state organizations to start purchasing US agricultural imports But that's for one second of all But the pressure that has put it as we put on the Chinese currency if you want I said to the you want dropping below the $7 mark. So one US to a dollar get to not not get to you a seven you want And the relevance of this is that previously the people's bank of China the Chinese central bank in the past Have been no to intervene in the currency markets and stabilize the currency if it's ever if it's ever coming under a bit of Weakness and the fact that the Beijing authorities didn't Intervene and they allowed the currency to fall kind of below the kind of a psychology important seven dollar mark Really shows us that kind of Beijing mean mean business the fact that the That the market didn't intervene. It's almost like an intervention in itself if that makes sense So so president Trump is likely to be kind of quite unhappy about that He historically is very quick to call out other Countries if they have been in his eyes manipulating their currency potentially weakening their currency To actually help their domestic exports But this case the fact that the people's bank of China just stood by and allow the currency to drop Really just says that they're kind of you know kind of in a way getting back at the US in that form This is led to sell off any metals like copper and iron ore. It's on turn We've had a major hammering of the mining companies, you know, think or Antitha gas radio tint or the likes because many of the because the footsie has a Disappointed a large amount of mining companies and all the gas companies in its makeup. The footsie's been it is pretty hard by this On top of that, we've had some economic indicators out of Europe today. We've actually had reasonably good Service numbers on the UK showed it improvement on the month and better than expected But given that there's a lot of which they've been given that that there's a lot of uncertainty In relation to the possibility of a no-deal Brexit if the power to serve fairly subdued You know this morning's numbers or I'm where you know a welcome addition You know we're well received but keep mind the kind of the wider negative trend in the power It's still a very much in play. Now. He has a fairly mediocre numbers of the result in terms of the service sector But keep mind given that there's Given this bit there's been a broad base sell-off in the US dollar. That's really seemed you cannot take precedence I'll take a look now at some of the major markets and then later on we take a look at the events of the week So starting off with the with the footsie with under us the footsie has endured quite a few days several days of Of being in the red and as you can see here the footsie 100 as is firmly below It's this balloon on here the fifth day moving average Let's and I see and it's also below it's 100 day moving average and but particularly kind of Relidence to the fifth day moving average, which should be talking about is some other equity markets charts We've had an aggressive move to the downside in the last number of days There's been a steady increase in a negative momentum. So momentum is The rise in negative momentum confirms that the the the downward move for stay at the market We're looking if you continue to press up lower from here We could be looking at this red line here the tune of the moving average which comes to the play at 7185 and the move below that could take this for this year here the lows of Early June in rally 70 79 mark any move to the upside In the footsie 100 could run into resistance at the water to moving average Which comes into play at 73 88 and above that the blue line here The fifth day moving average at 74 37 might act as support I would be talking about the fifth day moving average across the next few mark equity markets that I look at but essentially We're seeing across the board sell off in global stocks So that the wider negative trend is likely to continue This here is the the Germany 30 as we call it or the DAX Well, you know, as you can see the DAX is even kind of in a in worship Then the funds in London and aggressive sell off the last few days The fact of tax actually dreaded down as low this red line here. It's 200 a movie average We are holding up on that for the time being an active support and the past It's potentially going to act as support again in the future for now it is but that could all change and that comes into play at 11,647 if we do see a break a size of a break below the dirty moving average We could be like me heading back down toward this area here at 11,400 or this area here at 11,270 this level wasn't seen since the late March Now if you do have a bounce back in the In the DAX support for apologies resistance resistance could be found from this area here They go psychology Portland 12,000 mark and if you go beyond that we could be like any back towards this blue line the fifth They move the average 12,236 and it's only really if you can I take about go above that metric Because that would be begin to begin to think you know what maybe this is recent negative trend has come to an end I take a look now what's going over at the Dow Jones So the Dow Jones obviously we hit It could have mid-July we were kind of at all-time highs and then we've had a bit of a taper off and all bit more of an aggressive sell-off In the last few sessions, but we're holding which only but so we're below the Fifthly moving average here this blue line We're even also below the one hundred a moving average and has been a steady increase in negative momentum the last few days So if you do continue to press on lower from here We could be looking at it headed towards the psychology Portland 26,000 level on the on the Dow Jones And if you move below that this this trend line here could commit to play a support in around the 25,730 mark and we can see here on a few occasions that that line Did act as both support and resistance and a modification so and if so if a predictor Support line or trend line was relevant in the past it makes it more likely it will be so in the future But obviously they're not guarantees But if you do have a size of break below that we could see support be found from this red line here the truth in moving average 25,567 it's only really if you get ahead back above the fifth of the moving average At 26,518 it's only really if you're gonna get it back above that Could then we begin to think you know what may be the reason sell-off has come to an end Sticking with the us equity markets team. I'll go with the have a look at the s&p 500 similar situation whereby you're spreading record highs only in late in late July But we've fallen below the fifth of the moving average and we've even fallen below the two hundred a moving average here I apologize if you fall below the one hundred a moving average and essentially While we can hold the boat below these metrics is likely We could see further downward pressure on the s&p 500 and if we do press the lower from that We could be looking at any back down towards this trend line. It is considered to play it around 2830 and then we've below that By bringing the kind of psychology born to 2800 mark into play And this trend line obviously has a as a few occasions that actually has bought resistance and support On a number of occasions in the last year or so and last couple of years So it makes it more likely that it will be of importance in the near term in the future But there are no guarantees And if you do have a size of break below that you could be looking at it back towards the 200 moving average 2791 And once again, it's only really if you kind of hang out move back above So for example, this blue line here the Fifthly moving average, which comes to play at 2932 it's only really if you're going to take head back above that Because then we begin to think you know what maybe the wider upward trend in the s&p 500 is as a is going to continue Notice how on a few occasions in the last in 2019 The in the last few months even the fifthly moving average acts as but resistance and also support So if a metric has been important past it makes it more likely it will do so in the future And the reason why I was talking about 50 moving average on the s&p 500 the dow Jones the dachs and the futsy was because dow theory tells us that the averages must confirm each other And essentially if all the stock market of all the stock market So I was just talking about if they're all below their respective 50 moving averages It makes it more likely that the kind of wider negative trend is going to continue Conversely, if they're all above their perspective 50 moving averages makes it would make them more likely at the wider positive trend we continue, but essentially Dow theory talks about essentially says the markets must be kind of moving in the same direction And they're all falling and they're all below their respective 50 day moving averages So even if you're trading one and not the others it is worth keeping eye on what the other markets are doing Now you've talked about markets that have been under gold aggressive to clients Now let's take a look at the gold market So the combination of the software us daughter and also the fear in relation To the sell-off and global stocks have pushed gold up yet again So the gold the gold market has enjoyed a massive rally Especially in the last few months and it's that rally is very much continuing We're currently trading around 14 60 on the gold market And if the wider positive market what positive strength continues to play out We could be looking at targeting this area here in around 14 85 Given that Buying the buying buying the dip has been a popular strategy In recent months any moves to the downside might attract some fresh buyers So if you do have a move to the downside of gold Support could be found from this region here in around 1410 or this Have this trend line this this line here in at the psychology important 1400 or even perhaps as well as this region here in around 1382 I'll take a look what's going on on the oil market starting off a Brent crude It's obviously because China is a bit it's a big importer of Of of commodities like oil concerns about global growth and steady global manufacturing as a population on the oil market So I can see here Essentially since April gold's been the oil market rather has been a fairly clear downward trend in my series of lower Lower highs and lower lows We can see here We're well below the 50 the 50 movie average and the 200 a movie average The blue line being the 50 day movie average and the red line being the truly movie average And while we hold below those metrics, it's likely that we could see further losses in the oil market And the Brent market And if you look if you look at pressing the lower below the psychology important 60 bucks a barrel metric We could head back down to board this area here in 56 spot 71 It's only really if they should get back above the truly moving average at a 65 spot 37 Could that be could everything begin to think you know what maybe the recent downward trend has come to an end Take a look at wti Um Symmestration on wti. Where am I? I put wti's in a better shape but by and large it's also be it's also be getting a quick hit quite hard. Um I did have a fairly size of sell-off between april And into mid june and then a nice a nice recovery But notice since then we've had to know the lower low the lower high and yet again at the lower low So the pressure is very much to the downside on the on the on the wti market If you do with the press on a lower front mirror, and if you kind of take out this area in around 54 dollars a barrel We could really carry back down towards this region just below the 51 dollars a barrel area Uh, if it if the if market does manage to get a press on higher We really need to be kind of taken out. Um, the recent uh, this the recent high here in at a 58 spot 70 Before we can think you know what maybe the um, maybe the the downward trend has come to an end Turning our attention now to what's going on on the currency markets I talked about how the um The euro has pushed higher against us dollar on the back of overall dollar weakness Well by large, you know the the the wider negative trend has been very much in play It wasn't it was only I think it was only last week We we got down to about the uh, not too far away from the could have won trademark So the wider downward trend is still very much in play For for your dollar And if you look to if you look at turning over yet again If you do that and if the wider downward trend continues to play out We could really carry back down towards towards a one spot 10 Uh any move to the upside uh, the first move to the upside a euro dollar Running to resistance in around the one spot 12 metric and if you go beyond that We could make a turning this straight line here To remove the average and that comes into play in around one spot 13 um Pound versus the west dollar So obviously the the the uncertainty and fear surrounding, um We surrounding brexit and the possibility of a no deal brexit and the talk even of a possible general election That's really uh, it's really hit the pound very hard as we can see here The pound was just managed just off of last week's lows But notice how it moves to the upside have been very much very much limited So the wider downward trend is still very much in play For the pound versus the west dollar And if you do press on lower from here and if you take off the last week's lows We could really get any back down towards 120. I'm sure we go below that We could really get any back down towards again head down towards the 119 region Uh any move to the upside any bounce backs could run into resistance in around the one spot 24 area And if you go beyond that, um We could see resistance coming to play from this blue line here Which is a fit in with the average in at one spot 25 42 I'll just take a look now at some of the um some of the major Analysis on the week ahead the week ahead can be found on our website If you go to cbcmarkets.com under news and analysis, you'll find the the bulk of where we are. We post our analysis um, so we've talked about the um The pmi numbers that have been out of the euros on the uk this morning Uh, look ahead to tomorrow. We've we have the illustrate We have the industry decision from the reserve bank of australia Uh tomorrow, we also have first half figures from roll choice We have third quarter figures from disney on tuesday as well tomorrow second quarter figures from lift On wednesday on thursday, we have first half figures from city world On thursday, we have second quarter figures second quarter figures from uber On friday, we have second quarter uk gdp And also on friday, we have a canadian jobs jobs data If you have any uh comments to make on this video or any of the other videos We've made here at cbcmarkets. Please feel free to leave a view on google page and that's all for me. Thank you very much