 Hello and welcome to the Monday market update with me David Batten. Today's date is Monday the 21st of January 2019 and the time has just gone 945 GMT We've had a bit of a slow start in Europe today. The FTSE is largely unchanged Whereas mainland Europe has given back some of Friday's monster gains There's a bit of a sense that things are going to be quiet in Europe today as US markets are closed as It is Martin Luther King in junior day open the US. So therefore the US markets will not be open So we suspect low volatility and relatively low trading volumes here in Europe as I mentioned Some of the European markets have given back some of the games in light of the major valley that we saw on the back Friday We can't talk about today's moves without putting up the counter tax what we saw on Friday Essentially, US China trade optimism is fairly high. China came out Later Friday Friday afternoon UK time stating that they're looking to eliminate the trade deficit or the trade differences between the two countries and China one of the things that they've allegedly put forward was a six-year importer Pledge to import to import more US goods over the next six years that led to a quite large rally on Friday I was seeing some of that rally been handed back in light of the underwhelming economic indicators That we saw out of China overnight The GDP figure showed that the Chinese economy grew by 6.6 percent in 2018 It's lowest annual growth rate in 28 years You also had another another number of other indicators out of China The retail sales came in in line with the expectations Industrial production was slightly above expectations, but the fixed asset investment was below expectations so the numbers itself were okay, but The GDP figure is just underlines that China's slowing down and traders believe that if the Chinese economy is slowing down It makes them more likely To actually want to do a deal with the US in relation to trade So we have seen in mainland Europe some of the gains in the economic markets being handed back It's also what we're pointing out. We heard from John Williams on the Federal Reserve on Friday He said the interest rates in the US are near enough the near enough the neutral rate So once again reiterating The kind of the Fed's line that there may be not going to be pressing head We're tightening the monetary policy, you know in 2019. So that's also an element as well To be honest, it's been a fairly quiet day in terms of economic updates here on Monday So let's just take a look now Begin by taking a look now at the week ahead We can see here the week ahead article can be found on a platform If you go to the CMC markets calm and under news and analysis to find it Looking ahead to tomorrow. We have the Davos second World Economic Forum Taking place that's going to provide a lot of financial news, but probably what if you move the financial markets a whole lot Tomorrow we have UK unemployment and earnings. That's going to be a big one to watch out for Excuse me We have the Bank of Japan interest rate decision on Wednesday on Wednesday, we have fourth quarter Figures from forward over in the US on Thursday We also have the flash PMI updates from France and Germany and bearing in mind the stupid large economies in the eurozone Having gone through kind of an economic cooling In recent weeks and months of these figures could give some indication of how what state The two large economies in eurozone are in That will feed in to the European central bank the European central bank ECB Redecision on Thursday. We have trading update from restaurant group listed here in London on Thursday And also on Thursday. We have second quarter figures from Microsoft I'll take a look now at some of the major markets and see how they're holding up starting off with the footsie with under it So the market's been in a very obvious downward trend Since August and even though it attempted to get a break seven thousand last week and on Friday It didn't quite get there and ultimately we're still in the wider downward trend And while we remain below the seven thousand mark It's likely we could see the wider downward trend continue and if you do look to push lower from here We could be looking at it back towards the six thousand eight hundred area here And I pull up a move below that might bring six thousand six hundred into play and below that We could be looking at retesting the December low of six thousand five hundred and thirty six But if you do manage to hold on to the gains as been made since last since late December If you do let's push on higher from here, we could be looking at heading up towards the seven thousand two hundred or seven thousand two hundred and twenty region This price action here and that's that's on the condition if you do manage to hold above this blue line here The fifth of the moving average which comes to play at sixty eight ninety or even if it is all above Sixty six thousand eight hundred we could see the market push on higher from here Excuse me Take a look now what's going on over in Germany Similar situation where by the German market has been in a downward trend for for many months It's stage a decent bounce back from late December But today the market is lower as market has handed back some of the gains that have been made On Friday We're currently above the kind of psychology important eleven thousand mark And if you do manage to hold above eleven eleven thousand We could look at pressing on higher from here And if you do look to press on higher from here The first year to keep our for would be to get a Friday's high in around the eleven thousand two hundred and fifty two hundred and sixty region But if you press on higher from there keep an eye out for this Trend line here which comes into play from the trend line Resistance from the the highs of June to the highs of July and also through September And I'll come into play in around the eleven thousand six hundred region But if the market does manage to turn over on itself and bearing in mind You've had a classic example of a downward trend since July if the market does manage to turn over on itself yet again We could have been looking at heading back down below eleven thousand and a move below eleven thousand might bring the Ten thousand eight hundred price a region into play And the move below that might see us back down towards ten thousand four hundred and the move below that could bring us down to ten thousand two hundred and seventy seven Take a look now at what's going on on the S&P 500 in the US if we Scroll out if you draw a trend line between the lows of February 2016 and the lows of November 2016 we get this trend line along here And we can see that this trend line was respected on a number of occasions it We had fairly decent trend line support back in October and November But we can then see the market traded below traded kind of up in around the trend line load and above it in December But then was then once what once it went back below it it was firmly lower And now we've managed to push on higher here stage a very decent recovery since late December But we ran into resistance at the trend line and we're still Effectively just pretty much right on that trend line at the moment So if you do look to push on higher from here and we got a decent break north of that trend line And we managed to close above it on a daily basis That would suggest that we are heading higher front here And if you do move above that area and it do head above 2,700 they keep an eye on for this red line here the tune of the movie average Which you come into play two thousand seven hundred forty four and a move below that beyond that My take is up towards the two thousand eight hundred region If the Marcus can't get above the trend line and looks to kind of turn look turn over and turn lower again We may see support come into play in around the two thousand six hundred area or perhaps back down towards the two thousand five hundred and thirty two region Below that we could be like any heading back towards the latest emper the late early January number of two thousand four hundred and thirty eight It's a similar similar ish situation on the at the Dow Jones the other major US index if you draw a trend line between the lows of January February 2018 and April 2018 May 2018 you get this trend line along here now It isn't we can see a number occasions in the market traded below us In October and also in November, but the market a few occasions What's kind of solo consolidation in around around it and a lot of price action in around it but nonetheless market traded firmly below or firmly below it in Late December and then managed to push on higher and once again We can see the market has run into resistance at that old trend line So if that trend line is taken out we could be looking heading up towards the dirty moving average Which coincides in around the twenty five thousand region and if you go beyond that We could be looking ahead in towards the early December high event of just north of twenty six thousand seven hundred sorry twenty six thousand and seventy five in around that area there Dow theory this tells us that the averages must confirm each other So if the Dow Jones and get above its trend line All child all child line resistance and sold as the S&P 500 it makes it like likely more likely that both markets They keep moving higher If both markets run into resistance at their expected trend line start to turn lower It makes it more more likely that both markets will continue to be of lower If one breaks above the trend line where the other doesn't fail to break in front of this trend line resistance That's a bit that leaves a bit that that was just the markets are a bit indecisive or you'll be You wouldn't be as confident in the in the in the move in either in either move So essentially what you need to see is both markets moving in the same direction If the Dow Jones fails to get back above the trend line resistance We could see support come back into play in around the twenty four thousand region here And if you go below that we could be looking any back down towards this area here at twenty two thousand five hundred and eighty seven Taking a look at the commodities market now starting off at gold So the gold markets had a really good run since mid-October and then particularly since mid-November we get levels In a not too long ago where we're reaching levels not seen since June mid-June 2018 so Fairly it's a fairly solid multi-move highs for the gold market both as you can see here The market always shied away from the thirteen hundred level. So the market has managed to kind of pull back a bit It's still in its wider upward trend But if you do look to kind of push on lower from here, we could be looking at targeting 1265 or perhaps even down as Low as this area here This region here in around the 1250 region, but as I said the wider upward trend still very much intact If you do look to push on higher from here, and if you do take out thirteen hundred the next area You could be looking at testing is this area here at thirteen twenty six Take a look now at what's going on on the oil market starting off the print So I'll obviously had a major sell-off Between early October and mid-December mid to late December. I see here from late December The oil market has made a fairly decent recovery. It's bounce back. It's pulled back some of its gains It's gotten back above the Fifth-day moving average this blue line here But we would need to be taking out the the highs of early December before we become more confident that the This this rally and it's bounce back is going to continue So if you do look to press on higher keep an eye on for 63 spot 35 And if you go beyond that you could be looking at getting a backup towards this area here at 68 spot 36 and if you go beyond that the next big year to keep an eye on for will be the psychology important 70 bucks per barrel But at the same time we can't really ignore the fact America's been a major sell-off between between early October and late December So the market does manage to turn over on itself yet again We could be like any back towards this area here at 57 spot 50 and the move below that could bring us back down towards the 50 bucks per barrel region Take a look now at WTI. This is a very similar looking chart and WTI were by the market at a major sell-off between October and late December the market has been pushing higher since late December And if you look to press on higher from here, we could be looking at targeting the early December highs of 50 54 spot 14 and if you go beyond that we could be looking up towards the 50 50 a 10 region and I move beyond that would then bring the psychology important 60 bucks per barrel into play If the market does manage to drift lower again keeping in mind has been a very much wider downward trend for number of months We could find support coming to play in a 50 bucks per barrel and a move below 50 bucks per barrel Could bring us back down towards the early January lows of 44 spot 20 And a move below that could take us back down towards the 41 spot 76 region Take a look now. What's going on on the currency markets euro versus the US dollar? So broadly speaking since about mid November the euro has been pushing higher against the US dollar Even though we have seen a very decent correction in the last few days And if you draw a line between trend line between the lows of mid November and the lows of late December We get this trend line here So support may come into play in around the one spot 13 30 region if you do if you do look to move lower from here And a break below that could take us back down towards 1 13 and a break blow with 13 You take us back down towards one spot 12 16 But as I was saying we've seen a few a series of higher lows and a few higher highs recently The euro dollar some broader trend is to the upside. So if we do like to press on higher from here We could be looking at retesting The recent high of one spot 1570 and if you go beyond that you could be looking at it towards the 116 region Excuse me. Take a look now at pound dollar Same situation where by the pound verse you must order to broadly be moving higher Or since basic for the last same month or so since mid December so with the exception of this candle here which happened in the night on the kind of Flash crash on the currency markets The pound dollar has been pushing higher for about a month We have seen a bit of a sell-off in the last couple of sessions But if the wider the trend over the last month continues We could be looking at retesting the 130 region and a break beyond 130 Could take us up towards one spot 31 70 74 And a bit of a part of the market does manage to drift lower Support may come into play in this blue line here at the 50 moving average at one spot 27. It's 55 Like I was saying keep mine US markets are closed today So I suspect volatility and volumes training volumes for today to be fairly quiet But I'd say I would imagine that if we can have business as usual Tomorrow from tomorrow onwards, so I would imagine That the disappointing or the underwhelming Chinese figures that we saw over life We'll probably see the real impact of those Tomorrow tomorrow going forward Just before I go If you have any comments to make on this video or any of the other videos we've made here at CMC markets Please feel free to leave review on good reviews. That's all for me this week. Thank you very much