 Hello, everybody. Jasper speaking. Welcome to the weekly charting analysis webinar. We've got the risk warning on the screen. We're going to zoom through that and then get into the webinar. Any questions on the sound or the quality of the visual here? Just send me a chat message and indeed anything on any questions you have on the market. Then again, please just send a message through either the Q&A box or the chat box and I'll answer as best I can. So this could prove to be a pretty decisive week in markets and so definitely a good one for trading. So as I'm sure you're probably all aware, we've got the ECB decision this week and so there's been a lot of dovish talk from the ECB governing council members, particularly the President, Mario Draghi, suggesting that there's going to be some sort of extra stimulus announced this week. Now if we jump over to our Euro dollar chart, we can see that since March, steady kind of trend higher, teaked out around the 117 mark and then just since mid-October, lost six weeks just out of the tank in the Euro dollar here, lost 10 major handles here, thousand pips just in six weeks. So been a great trade if you've been short. Now obviously at this point the trade gets a little less obvious because we are approaching this 105 mark and that's the reason I'm mentioning them bringing up this chart specifically is I think this is something that's indirectly being targeted by the ECB. They want a lower Euro exchange rate. Obviously the benchmark is against the dollar but also against the pound and that's also been happening. Inflation is not as low as it was when the QE was first introduced in March. There's not actually any deflation at the moment according to the latest CPI figures and growth and business sentiment seem to be gradually improving in Europe so this is really just trying to push down the exchange rate and speed up the recovery that way. Obviously in the process it's as the Euro crashing as we mentioned but it also sends asset prices flying. So at that point at this juncture we can flip across to our Germany 30 chart our proxy for the German DAX equity index benchmark and we can see that here we're up at three months highs in German stocks. The top 30 German stocks are the best levels since August pretty much before the crash when China devalued their currency. These two charts are not coincidence. The main contributing factor here is the ECB meeting this week and so that's on Thursday. So unlike on previous occasions where the actual interest rates have been a bit of a non-issue and we've really been waiting for the press conference not so much this time we're actually looking for a possible cut to the deposit rate it's actually consensus amongst economists that there will be some cut so pay attention to that beta release at 12.30 and then you will have the press conference about an hour later in which any further announcements will probably be made in terms of either expanding how long there will be buying bonds so right now they're buying 60 billion euros a month and that's supposed to end in September 2016 they may say that it's going to end in September 2017 so obviously that means overall they're going to have bought a lot more bonds. They could do that or they could just increase the amount they're buying each month so maybe from 60 billion euros to 70 billion euros. Consensus is for the former so if they do actually increase the monthly purchases that would be a big positive surprise I think the net result of this chart that we're looking at would be a big spike higher and back over to that euro chart I think the result of any extra purchases per month being announced would probably mean a drop through this multi-year low that we placed back in March beneath 105 and I think that could be the catalyst to send the euro back down to parity from the dollar but that said I don't actually think that's probably going to happen like I said there isn't really the data in place to justify such heavy handed moves some of the member countries particularly Germany are really not in favour of these so even though it doesn't require consensus to do this I don't think the internal politics ECB is going to allow for really drastic policy when some of the members are really against it so there's going to be an interesting one it's really going to dictate direction now the other one the other couple of considerations that we got here both taking place on Friday one is the jobs report obviously it's the first Friday of the month and then we've also got the OPEC decision on whether they're going to cut production of oil basically you know it's tricky when it comes to the jobs report let's jump over to the US 30 this is our proxy for the Dow Jones obviously I mentioned in the chart forum here that we're still in this kind of double top or not territory here's the first loop on the double top does it turn into this and a breakdown or do we just break higher from here and make new higher highs and we're not far off the record high territory so that was in May so you know with you know break higher from here yes there's a few peaks involved and we'll probably take a little while to get there but you know that would be a strong indication that we're going to be able to get there up to the 1800 type territory because this is 18,000 basically where we're finding resistance in the moment so you know whether this pattern plays out or not I would say it's got a good amount of dependence first on the ECB but then also you know that's probably going to create some sort of action in and around this line we could get a false break depending on some scenario of ECB and then a push lower or maybe just a break and a continuation of both those reports are kind of favorable to markets what is going to be favorable to markets for the jobs report you know I think that you know it's tricky one it's either good data is good or good data is bad you know so if we have I think probably the easiest one to call is when we have a good report which isn't crazily good I think that's good what we don't want from a market perspective in terms of markets going higher what we don't want is some really exceptionally strong jobs report that suggests that actually the Fed's going to change its language a bit and maybe it's not going to be just a one interest rate hike followed by a few months of taking a break and then maybe one or two next year maybe it's going to be a faster pace of tightening because the economy is growing stronger than thought so we want this kind of Goldilocks job report where it's not too hot not too cold something in the region of sort of 250,000 jobs created I think keeps the markets happy the economy is doing well but it's not so well that the Fed really needs to go nuts tightening rates a lot of times next year so it should be a really weak number I think you know that that could weigh on markets and I think if it's a really strong number that could weigh on markets so we're looking for that middle ground and this is how I'm interpreting things here weak number obviously just implies the economy is too weak to handle a rate hike which seems almost inevitable at this point given the language of the Fed officials so we touched on some of this sort of main currency I did mention OPEC general thought here is that they're not going to cut production you know obviously the general logic being here that if they do decide to cut supply sort of general supply and demand curves that you deal with in economics would tell you that a lower supply would mean demand could perhaps outstrip supply and that would generally push prices higher at the very least even if demand is not outstripping supply still it will be slightly better aligned at the moment there's too much supply the market's oversupplied we know the level of demand given that the slowdown in China is not justifying how much oil we're producing so still the feeling is that probably let me just pull up this all chart while I'm chatting about it Brent is the one that you know would have the most influence by OPEC but obviously WTI pretty correlated where we're sitting at Brent at the moment definitely a pretty pivotal level so we pushed down here down to the multi-year lows according to the cash price we didn't make multi-year lows if you look at the front-ment futures we actually did so a little confusing now obviously when you trade futures I would just pay attention to the cash price what we're considering here is that the market just hasn't been a massive rally higher we had those geopolitical tensions on the Paris attacks which was justification for buying oil but really it's just a bit of a little bounce off the lows because markets weren't able to push them into multi-year lows before we knew what was going to happen in this OPEC meeting but I suspect they're not going to do anything and what we're getting here is a support turned into resistance and then a drop that's my default scenario I think in the meantime before we get to Friday we could get another little run up to here just to kind of test the willingness of buyers to take it through those highs but I don't think they're going to be too willing still while above this low we are in a kind of range-bound environment so those buying off the lows down here it's been a good trade so far and it's not to say that we can't push further up into the range but I think you'll see that these are kind of lower highs that are being formed here lower lows it's a trend inside a bigger channel which looks probably there's all probabilities here obviously we don't know for sure but I would say probabilities favor this downtrend pushing out through the bottom of this channel that we're in at the moment but we haven't broken yet so we're just looking to what seems most likely something to keep an eye on is this declining RSI trend line here this has worked quite well on these previous two peaks if we get a push through there then above the 50 in RSI that is a slightly different dynamic and that could carry us back up maybe to 48 back a bit above the 61.8 level here but I'm not entirely convinced it could take us all the way back to 50 that certainly could so the conclusion here if OPEC do cut production then that would be pretty unexpected and we could expect a seriously large price move in Brent and WTI but probably they're not going to and it might come down to the language maybe they can sort of twist the language to suggest that it's still on the cards that they could and that they're going to be determined to support the market and these kinds of rhetoric could be supported at the price but I think overall the trending commodities is lower and you probably don't want to try and outsmart that at the moment particularly from a day trading perspective deep pocketed long term investor maybe day trading to my mind no so since we were just talking about this let's have a look at WTI as well similar looking idea here you can see we didn't get quite as close to kind of bounce off this breakout area here but a similar thing in terms of there was our support bounced into it, bounced again and now we're kind of rolling off with a little bit of a bounce today probably not going to go too far I'd imagine before the OPEC meeting more in depth into the major industries we're going to look at the US 30 let's look at the UK 100 here this is a short term chart this is a what shortish four hour chart what you can see here is that as of last week we bounced off this was potentially a downslaping trend line it was confirmed here and then actually this line I didn't run to there I actually did draw this in last week before we retested it here just because it was to me it was one of those levels that we had the strong momentum if we were going to hold above this area this was what could take us pretty quickly back through the rising trend line and as it happens actually that line worked pretty perfectly it was basically just those short term lows that's the logic of the trend if you can hold the short term lows then you're still kind of strictly speaking in an uptrend so that's worked out nicely we're pushing back into the trend line I would suggest given the speed of the return to the trend line we're probably going to get pushed through higher but if we do pull out to the longer term perspective for a longer term perspective here we can see that we are trending higher we've got the higher low here we're in the process of building a higher here we just need to get through this declining trend line to take us back up to I would say firstly the 6-4-50 kind of area and then the peak that we reached in October around sort of just beneath the 6-500 level but again it's one of those as we looked on the short term chart we're in this kind of rising uptrend but still well beneath that peak here it's kind of a rising uptrend within a kind of choppy longer term picture now you'll notice the I already covered the Germany 30 chart but worth quickly skipping back to it briefly because if you look at that chart pushing right up here highest of the day today highest since August now if we just look at something a bit more reflective of Europe in general break in high today nicely today is definitely a breakout day through the 200 day moving average on the Euro stocks 50 or our version of it, the Euro 50 chart and through the 3,500 psychological number so a breakout and a number of fronts taken place today we need to close around these levels for it to be confirmed but nonetheless you can see if we were looking at the Germany 30 chart that's more kind of up here somewhere was the Euro 50 down here basically the rest of Europe's lagging behind a bit to my mind the reason for that is that Germany's DAX index has made up of a larger big a lot of manufacturers but largely big exporters Germany's Europe's biggest exporter and the Euro is dropping ahead of the CCD meeting so you know this is the DAX or the Germany 30 rather it's just disproportionately benefiting because of this because of this policy that's about to come up or looks like it's about to come up from the ECB the covered indices there actually covered all but any other markets you want me to look at please again let me know we're going to just in the line of sight here I think I'm just going to go straight for gold now gold just on Friday last week made it down to new fresh five-year lows there you may be wondering what this chart is this is the weekly chart of gold now this trend line is a bit dubious here I basically really joined it through the December 2013 and November 2014 lows but it does work quite well if you discount this spike in terms of the low here from June 2013 now we had you may notice the sort of cyclical nature of gold here in terms of where we put in significant bottoms we put a significant bottom here in December 2013 it was then November 2014 and here we are in November nearly December 2015 so third year in the truck will we get another bounce in gold feasibly if you go by this trend line it's now after a few false breakouts here in July which of course again was the interim bottom in here in 2013 and also am I scrambling for data here and also of course this year so July has been a bit of sort of mid-date so it's sort of a six month slash more importantly 12 month cycle of bottoms here in gold but we have breaking through that that July low here as well as this declining trend line of the lows so the momentum does appear to be speeding up a bit to the downside and that makes sense in the context of the Fed raising rates you know there's been a lot of geopolitical instability gold got a bit of a bounce from that and that's kind of this bounce we're talking about here but not much and it's fallen off a cliff again just in the preceding day as soon as that kind of risk came out of the markets I mean there still is a lot of risk avoidance but it tends to be heading towards government bonds particularly European government bonds where we know we're about to get a bunch of stimulus in which central banks can be buying those bonds so you know which would you choose safe haven that earns interest or one that doesn't admittedly a lot of European bonds actually negative interest now but still the money seems to be flowing to bond markets not to gold so trend there's a weekly chart but you know if we go short term unmistakably lower they had this triangle pattern drawn in previously on gold but we broken we broken through that was it here that I had it that was a 4L chart oh I had a wedge pattern going on here well it's just worth paying attention to the down sloping trendline of that wedge this proved a bit supported down at lower levels but nonetheless the trend is still clearly down silver has actually been holding up well compared to gold this is the 4L chart again it's basically been contained within this down sloping trendline and the multi year lows where it made a little false breakout one was that last week tail end of November year last week so did for one day make an intraday or make a new 6 year low but hasn't held it so what we're looking for is either a close through into multi year lows to continue the trend or this proves to be a bottoming pattern in which we get at least an interim bottom and we get up mountains back I would say towards 15 would be the level people be targeting and with covered Brent within the context of the OPEC report we've got about 7 minutes to go here so we're just going to dig into the FX pairs for the remainder but obviously any other products please let me know I'm happy to cover those as well Euro we've looked at let's just cover it in a bit more detail maybe so we mentioned that there is this downward sloping trendline on the daily chart if we look more specifically at the 4L chart this does appear to be what's kind of containing the action accelerated a bit to the downsides we haven't actually made it back from the last two bounces so we're really kind of grinding away into the support without too much bounce no one really wants to be long year at this point which obviously does present a big contrarian opportunity going into this ECB meeting there is a risk that they disappoint expectations are built up a fair bit this talk last week of a two tiered deposit rate without digging into too much of the details means they could actually cut the deposit rate further into the negative than previously thought if they split it up where different banks pay different amounts for holding money on deposit still in the context of those rumors expectations are high expectations are easy to disappoint obviously so certainly you can't deny the downtrend but 106 has sort of see it here it does look like it's kind of given away here we were acting in this kind of level as a support dip through it seemed to have based out a slightly newer level below about 105-60 now it's kind of the new area of support I think it would take a brave soul to be long before the report because you just the downside could be quite substantial like I mentioned half the intention here is to lower the euro so do you want to stand in the way of the European Central Bank it's a brave trade it's a bit of a hero trade in a way if you want to be a hero go for it if you want to make more consistent lower risk easy money if you like to my mind better following the trend when do we know that trend is broken this trend line has been fairly reliable I think a break through that and a close above could tell us that expectations have not been met and maybe the ECB is not doing enough in the eyes of the market always already been priced in and we're going to get a bit of a technical bounce so probably keep an eye on that that declining trend line over to cable not much to move cable more just indirect effects the Bank of England is kind of caught in the middle between the ECB and the Fed Fed hiking in December potentially and the ECB stimulus in December the BLE the economy is in my mind as strong as the US in terms of the economic data maybe even stronger if you look at wages but if you just look at the euro pound chart which we can just do right now you can understand given that Europe is our biggest export destination why the Bank of England and you know crash the pound has appreciated a lot against the euro and against other currencies as well so the Bank of England don't want to encourage excessive sterling strength hampering all our exporters damaging our growth just to try and keep up with the Fed so I'm kind of skipping around here between charts but I was saying with cable specifically here we're in the down slipping channel we're obviously at the bottom of the channel and largely that's because of the more dovish commentary from the Bank of England recently we've got a Bank of England stability review tomorrow also financial stability review also bank stress tests they don't really necessarily impact on the monetary policy although there is talk that they could be a bit more you know they could require the banks to hold more money and so that would mean they have slightly less money to lend out so that's in a way a bit of kind of tightening of policy and so that could be you know that could be you know almost it could almost be a negative for the pound because it kind of weighs on growth a bit but no one's any any extra interest as they would if they just raised rates so but here you can see basically I think for this 150 that's right where we are now right into that round number it'd be surprising if we didn't get some sort of bounce back to my mind in the area of the 150 down to the bottom of the down slipping trend line here clearly the trend is down so you're fighting the trend here but you sort of expect a bit of a bounce back so maybe treat that as an area of caution for shorts and you know maybe an opportunity if we do get a bounce to get short again because I think probably the bias is lower while below this 200 day moving average and within this down slipping channel and below 150 is a bit of a psychological change to my you know apart from this lower low here you know this I think that would be would be kind of out of a range mode almost and almost kind of more into a downtrend mode should we get through that 150 level yeah good question about yeah, dollar swiss I mentioned that in my evening note at the end of last week the swiss prank we've since the dollar since the SMB dpegged its currency yeah I mean it's all the same factors involved the the dollars rising because everyone expects the Fed to raise rates and the swiss currency is being devalued and then there is a bit of an outside thought process here that maybe the SMB is going to have to do something if they're leaving it a bit late now the ECB meetings Thursday but obviously before the ECB first introduced QE the SMB dpegged their currency they've got they haven't got as many tools to fight it this time around they can't really directly take on the European Central Bank in terms of asset purchases they're just a smaller bank they've got less reserves they wouldn't win that battle so to some extent there's not much they can do but they could certainly come out with some kind of rhetoric perhaps and they can at least cut their rates a bit further and you know they can actually loosen their policy a bit so obviously that would just make that would make the Swiss even relatively weaker against the dollar but if we just switch over to EuroSwiss quickly I would say based on the EuroSwiss rate as it stands the SMB the Swiss National Bank is probably not going to do anything you know the Euro has bounced a fair bit back there was the the dpegging and here we are bounce back from way below parity back up to the 1.1 kind of level is just where we've been kind of hovering around for a while so I think the SMB was comfortable here the question is I suppose and maybe this is what the SMB are waiting for and you know if we do get a big drop in you know if we do have a stimulus introduced this week then a big drop in this rate maybe the Swiss will be forced to act and so you don't necessarily want to fight the ECB by selling Swiss francs but you know selling Swiss francs against the dollar that makes more sense fundamentally because obviously the Fed is about to tighten so you know EuroSwissing itself potentially one for shorting because given the euro dollars already pushed down near that 105 multi-year low handle this one's obviously nowhere near these dpeg blows so more options for shorting maybe but for going long you don't necessarily want to go long the euro given what the ECB's got planned but you could go long dollar Swiss on this breakout so yeah not to say that the breakout can't fail and we can't drop back down on dollar Swiss you know that would make sense in the context of you know maybe disappointment from the ECB and you know as I mentioned a sort of you know maybe a weaker jobs number that devalues the dollar that could make that happen but you know general fundamentals you know long dollar short euro long or short Swiss depending on what the ECB does so that's about it we're about two minutes over now so I'm going to call it a day here thanks very much for attending everyone good luck with your trading this week Jasper Law signing out