 Good morning and welcome to the Monday market update with me David Madden Today's date is Monday the 8th of June 2020 and the time has just gone 1109 British summer time and it's been a fairly quiet start to the European session. It's a bit mixed The FTSE 100 was above 6,500 we're just about just dip back below that We're seeing small gains on the DAX in Germany and the CAG 40 Apologies between small losses rather on the on the continental markets But I suppose low volatility and a bit of a lackluster session is probably the best way to characterize What we've seen in trading this week Keep in mind we had this, you know some small gains were registered in Asia overnight But at the back end of last week the US non-farm payrolls report was the kind of the talk of the town it had a Well very well received number and we saw Decent moves to the upside in European as well as European stocks. So we had a bit of a So the carry-on for the Asian session Was it was a bit slightly positive and it's a bit mixed here in Europe today? Taking a look at what we saw out of the US at the back end of last week Going into the report the headline non-farm payrolls figure was tipped to show a decline of 8 million jobs in the month of May In fact it came in at an increase of 2.5 million. Now keep in mind the April figures Was revived higher. So something somewhere in the region of 20.68 million people lost their jobs in April So obviously the US labor market is in a terrible state It's it's nowhere near as strong as it was before the COVID-19 crisis, but the fact that Two and a half million jobs were created in May its indication that you know, you know what maybe the worst is over This could be the turning point for the for the US economy and the kind of the wider kind of global economy because all the economic indicator if you've seen Services figures manufacturing figures that which came out in the past seven or eight days Have all shown kind of signs that things are are still terrible for the month of May in terms of economic activity rates But they're a lot better than what they were in April, which is which is absolutely appalling So this feeds into the wider narrative that economies Governments are loosening their lockdown restrictions and economies are opening up and things are getting better Hence why we saw, you know, you know, why we've seen Multi-month gains that some European European markets for example the FTSE 100 We've seen levels multi-month gains being backed up on this, you know American indices and even some cases looking at the massive 100 all-time highs are being racked up Also in the last in the last 24 hours 48 hours We've had some trade figures out of China and to be fair they were fairly disappointing imports Were we're fairly there's a sharp decline in imports and it came in worse than expected But China is a big importer of commodities So it's quite possible that the kind of the dollar amount that was spent to come out on the dollar amount that The China imported in commodities was more down to the fact that commodity prices Agriculture products energies metals was actually weaker rather than actually pure demand on top of that Chinese exports declined in May by over by over 3% a decline of 3.3 Keep mind in April we saw an increase of a surprise increase which might be down to the to China selling medical equipment to the best the rest of the world so Demand around the world seems to be a bit weak But that the flip side internal demand in China may not be as weak as the headline inflation headline import figure would suggest over the weekend OPEC plus agreed to bet to Ever so slightly tweak the historic or the extremely deep production costs that they currently have in place the current production Guide the current production agreement is has seen 9.7 million barrels per day been taken off the market in terms of output That's I think going that's in you know, that was in May. It's also in June When we get into July that's going to change from a decline of 9.7 million to a decline of 9.6 million So ever so slightly change Mexico or opting out of it Other members of the OPEC plus agreement who are who have committed to the 9.6 million barrels per day Decline on output they will they will have to comply with it And if they don't comply with it in July, they're going to have to kind of make up for it in August and September So OPEC plus are very serious about everyone following the Towing the line as a were in addition to that in the pack on the last couple of days We've heard from Saudi Arabia who are increasing their selling prices that the rate at which the price of which they sell to others The the price of which are selling to Asia was the largest increment seen in at least 20 years Selling prices to other countries other areas around the world has also increased So with that we've seen you know firmer all prices, which I'll be covering a Brent crude later on in today's update So let's have a look at what's going on in the markets. Take a look now We can see here at the foot to an under this is a very common theme has been a nice upward trend for the last few months A nice series of higher highs and higher lows So we're in the solid upward trend should you can continue to press or press on from here We're currently just south of 6500 if you continue to press on higher from here, we could be looking heading up towards this red line here In the Canada, you know the short and medium term, which is the two or two moving average and that comes into play at 68 46 And he moves to the downside might find some support from this yellow line here Which is the 100 day move the average and that comes in the play at 63 58 And even if you have a fairly size of break below that support could be found from this area here in around 62 32 And it's only really if you have a decent break below that Could then we be look heading back towards the kind of cycle as important as 6,000 but keep in mind The the trend has been up or has been in a kind of solid upward trend for the last few months So it's only really if you have a decent break below 6,000 continue begin to question the upward trend of the past few months And now take a look at what's going on over in Germany fairly a similar situation there in Germany Whereby we've seen the attacks Press higher for the last number of months We were currently trading in the Dax around 12,700 and 890 there they're about just just south of 12,000 Just not not too far away from 12,800 if you continue to press on higher from here on the Dax Next big level to keep an eye for will be 13,000 big psychological number something out markets Obviously be traders will be kind of a fixated on so if you do see a bit of a pullback work We potentially found some support. We could see support going to play from this red line here to 200 in moving average And that comes to play at 12,134 It's often that that metric through the moving average is often going to use as a good barometer for is a market strong Or is a weak or comfortably above it So it's just that the markets are strong But if you do see a pullback down towards that area, we could see a fresh buyers enter the fold even if you do take Drop below it that would necessarily kind of completely negate the recent bullish trend of the last few months If you move below the tour the moving average support could be found from the water to move the average We can see here We do this yellow line here and we can see on a few occasions in late May and into early June It acted nicely as support and if a metric is actually that support in the past It makes it likely I like to support in the future, but there's obviously no guarantees And that comes into play just south of 11,500 We talked about mentions the US markets At the beginning of this video to look at now. I'll have a look at the Dow Jones We're obviously a few hours away from the cash trading situation over in New York But it looks that looks like we're going to open up on the cash when once cash trading gets underway in New York It looks like we're going to open up a level that last seen in late February So we're talking multi-month highs. That's a very, you know, that's a clear indication of how good a bullish Strong sentiment is So we're current we're expecting the Dow Jones to open up around 27,222 There they're abouts if you press on higher from here keep them out on this this line here in around 20 This line here, which comes to the play at 28,164 If you do drift lower from here support could be found from the turn of the moving average Which comes in the play at 26,351 And if you have a decent break below that we could find support from the one or the moving average similar to the next in around 25,152 for the same reason that you know, it didn't quite it was didn't act as perfect support But we saw a bit of consolidation in around that region So once again if a metric has been important in the past it makes it more likely it'll be important in the future and now for the last Index I'll cover of today. I'll take a look at the S&P 500 Serious duration to the DAX. It's been a well Serious duration to the FTSE the DAX the Dow and the Dow Jones has been pushing higher for the last number of months The cash once cash trading gets underway. We could We could be looking at setting a new multi-month high We could be looking at setting levels last seen in in late February. So sentiment is clearly strong We're currently we're respecting the the S&P 500 to open just south of three thousand two hundred So if you can retake three thousand two hundred, we could be then looking towards head to head towards three thousand two hundred and ten Twenty so on and so forth. And if you look to kind of build on those gains the more like medium term target could be 3,300 If you do look to kind of drift lower from here We could find some support coming from the lows of Friday in around kind of three thousand one hundred and eight And I feel a move below that we could be like heavy back towards the two-ready moving average and that comes to play at 30-15, you know, we can see here on a few occasions in late March in late May rather That that the particular level acted as active support. So it's one to keep an eye out for You know one of the common themes I want to just mention here across to the FTSE 100 the DAX the Dow Jones And the S&P 500 they've all been pressing higher and they've all essentially either today or in the last few days Have set multi-month highs and why I want to find pointing that out is that One the tenants of Dow theory is that the averages must confirm each other which essentially says Markets that are similar to each other. You would expect Those markets to be moving in a similar direction and as we can see here They're all moving in a nice upward trend and on top of that. They've all been setting multi-month highs So if you're trading one of those four indices You know it is worth your while keeping an eye what the other ones are doing because if for example If you see that the FTSE 100 is an upward trend It's fairly likely that the others will continue to be on that trend and if they veer off That could be a sign that that there is that we could see a change in the direction of the FTSE 100 But also if markets are all moving higher together It makes it more likely that kind of that particular trend in this case an upward trend is going to continue Now what I'll do now is I'll move on to currencies Look a look take a look initially at euro dollar and then pound dollar So Speaking of kind of common themes is easy We've seen some weakness in the US dollar in the last couple of weeks It's going to rebound at it on Friday Which would explain this downward move on euro and euro dollar But we can see here that the euro has been getting decent ground versus the The US dollar we've managed to pull back a small bit of gains recently racked up But they can upper trend over the last few weeks is still in play should you continue to press on higher from here on euro dollar We could look at targeting 114 and a move beyond 14 could take us up towards the highs of early March in around one spot 1495 if we do manage to drift a bit lower from here because we're currently in around 1286 we could find some support from this area here in around the kind of 112 zone It's only really if you have a decent break below that could then we be like heading back down towards this red line here Which is the turn to move the average and that comes to play just north of 110 which in itself is a big psychological number Fairly big a fairly big metric to keep an eye out on for euro dollar So taking a look now at pound dollar Similar situation here the kind of once again the common theme is a weakness in the US dollar We've seen since about the middle of last month so the decent move to the upside in the pound versus the US dollar We're trading there there about on the 200 a moving average So this metric and you can see here that this metric Active a resistance in late April and also in mid April so then a metric has been important in the past It makes it likely that the important in the future, but once again, there are no guarantees So if you can get back above the turn to move the average and we can build on those gains We could then be looking up heading towards the kind of 130 area That would be a fairly important metric to keep an eye out for on the on the pound versus the versus the US dollar But if you managed it, but if it acts at resistance like it has previously done or we look different a press on lower We could be looking at heading it back towards this blue line here the fifth of the moving average We can see in a few occasions that act as support in the last few weeks So keep an eye out on that and that comes into play at one spot 23 87 And lastly what I'll do is I'll take a look at bring crude oil I take a look at bring crude oil the August contract So as I mentioned Production cuts have been extended in relation to OPEC and the Saudis have up their selling price as well So we can see here. We've been a nice upward trend a series of higher highs and higher lows on the brain crude August contract In fact today we hit levels last seen in early March So, you know multi-month highs have been racked up So the upward trend is intact and if you press on higher from here We could be looking at targeting this zone here in around 46 dollars a barrel If you have a bit of a pullback support could be found from the $40 bar bar metric, you know It's an area it's a big number as far as them as far as the oil market is concerned And it's only really if you have a have a major break below this line here The fifth at a moving average and that comes into play at 33 spot 53 It's only really if you have a decent break below that could then we begin to think you know what maybe the recent upward trend of The past few months has come to an end. I want you to want to thank you for tuning in today's videos Now that we have the technology thing a technology technological issues sorted out on my end Hopefully we get back to the usual routine of having a Elcava a outlook for the week on one posted on Mondays or Tuesdays and also thrown in for good measure on say Wednesday or Thursday an individual chart of the week. So stay safe. Have a good training week and good luck