 Good morning and welcome to the weekly market update with me David Madden. Today's date is Monday the 15th of June 2020 and the time has just gone 939 for this summer time and It's been a pretty horrendous start to the trading week essentially the big story of the stories of past 24 hours 48 hours has been renewed fears of a potential second wave of coronavirus Over the weekend in Beijing there was a partial lockdown in certain sections or areas of the city The the the rise in new cases in Japan in Tokyo to be precise was the highest level In over in over a month and also from the back in the last weekend over the weekend We've heard at various US states quite a few Arizona The North and South Carolina, Texas just in a few have all reported increases in the number of new COVID-19 cases and this is in connection with the reopening of economies so the tricky position is The more you reopen economy the more you increase economic activity and in turn Do stock market sentiment look how stocks metals and energies all perform between lace To be late March and early June a lot of a huge amount of those games is built up on the idea governments have a handle of the health crisis Economy is starting to reopen and it's just starting to go kind of back to normal I guess what once the actually economies go down that route and actually losing Some of the lockdown restrictions were now seeing an increase in cases so that that really spooked markets so it's very much in a Or risk off sentiment we're seeing stocks fall heavy the thought sees down about one point eight percent The backs and the crack are both down in excess of two percent We're expecting the S&P 500 to open more than two percent lower Metals are lower energies are lower It's kind of it's a thing. It's it's it's things like the Japanese yen and the US dollar have actually benefited Doing reasonably well this morning as trainers are seeking out Assets that are deemed to be low risk. So before I get into the indices and they and then For exchange pairs and a couple of few commodities a quick you take a look up a week ahead On the weekend article can be found on a website if you're going to see if the markets calm Under insights news analysis. That's where the bulk of our analysis can be found so quickly running through The weekend article over the weekend overnight we had some numbers out of China Industrial production fix acid investment and retail sales Numbers of it mixed on one hand all of the all of the readings came in below expectations But on the same side on the other side of going all the readings Which was by the month of May all showed improvement in comparison with April So it would seem that the they have the economy in China is rebounding What doesn't appear to be bounding as fast as economists were expecting it. So that's also feeding in with sentiment here So traders are be traders that will be kind of possibly viewing economic indicators from From Western economies to rebound like they thought in China, but we could see a a small recovery And she dissipated Looking ahead to tomorrow UK unemployment figures coming out early morning We have full your figures from Ashtet London listed company, which makes the bulk of this money In in in the US. We also have US retail sales coming out tomorrow Looking ahead to Wednesday full your figures from online fashion house boo-hoo. There's their stock prices done quite well in 2020 it's an online. It's an online essentially online only fashion house So they're because of their business that actually don't quite well The high-end house builder a broadly group of full your figures out on Wednesday And we have the interest rate decision by the Bank of England. So it's highly likely that rates Not the policy will be left on change really kind of commentary about what what they might look to do down the line In terms of additional easing or whatever or a potential stimulus package. That's going to be very much Focus of a terrorist attention kind of a corp the cruise liner. They've taken a clobbering during the during the coronavirus crisis because of the nature of tourism and Kroger had a first board number is coming out on Thursday. And lastly Lastly for the week UK retail sales. We post it on Friday morning So what I'll now do is take a look at some of the major indices starting off at the first year and under it Like I said here, we did a great run. This is a very common theme here late March up until early June a great run in in stock markets In fact this day last week the first year and under it hit its highest level seen since March So it's missing a three-month high this year last week and then at the back end the last week Breaking say on Thursday the 11th. There was kind of creeping fears of Increasing cases and in coronavirus crisis coronavirus cases in the US. So we have seen a we have seen markets fall off fall off and on Thursday a bit of a rebound on Friday And here we go lower again on Monday So the sentiment in the last few days is certainly to the downside But if you can hold above this line here The fifth that he moved the average you can see here on a few occasions that metric there They're about actually that support And it currently seems to be acting in support for the time being but if you can hold above that 5390 We could look actually kind of pushing on higher again and retesting You can a six thousand two in the area or potentially this the lows here from on the 30 June in around 62 32 But if we do have a slice of break below this line here the fifth of the movie average This could take us back down towards this zone here down around 55,800 Take a look now. What's going on over in Germany on the ducks situation and a decent rally between in the end of March into into early early June Markets be moving lower past number of sessions Excuse me, you can see it at the market is now firmly below this red line here The turn of the movie average and that comes into play at 12,146 We fall into a level I've seen Basically at the very beginning of the month So if you do look to kind of press on lower from here support could be found from this yellow line here Which is the 100 a movie average and that comes into play at eleven thousand four hundred and twenty two Or we can see them on a couple of occasions in late in late May and in early June that metric acted as nice nicely as support and the metrics active as Support in the past it makes it more likely it will act to support in the future. Although there are no guarantees But if you do have the size of break below that you could look at testing the 50 movie average This blue line along here and that comes into play just north of 11,000 11,071 so 11,071, you know, 11,000 is a big psychological number So there's a potential zone of support should you move on lower from that from here once again on a couple of occasions If it's the movie average action support, so it could be an area of Importance in the near term if I'm doing a hand mark as much to turn around How we had had to head back north again. We could be looking at retesting this red line You know, we could be looking at retesting first of all 12,000 big cycle and she number Then if you go beyond that, you could then be looking at targeting it to remove the average at 12,146 and if you get back to both that level we could then be looking at retesting the highest scene at the beginning of the month Over in the US take a look. What's going on the Dow Jones The Dow Jones and the S&P 500 both set There there are lots four month highs at the beginning of the month But since then we've seen a fairly decent sell-off in a in a particularly US US stocks We can see that that is moving lower It's just about holding above this blue line here the fifth of the movie average and that comes in the play around 24,000 Around 24,498 so just south of 24,500 If you do have a break below that good that could that could take us back down towards there 24,000 mark if you have a decent break below that you take us up down to the lowest scene in mid-June in around In this in this level here in around 22,788 Might be very much a wider trend over the last few months has been a play so If the markets do manage to recover a little And because it does get back above 25,000 They could be looking at targeting The highs seen on Friday in around 25 25,962 If you go beyond that this red line here the Trinity will be average at 26,346 I'd act as a resistance as a resistance and if you take off out and Fedders within capital up the other sites firmly set on the highs that were posted at the beginning in the first week in June taking a look now To the S&P 500 Service scenario you and the S&P 500 provides enjoyed a major rally Several months, but we've seen quite aggressive sell-off in the past few sessions We can see here that I'm really focusing on this Extremely bearish that can candle along here Recoups some of the ground or Friday just gone But what would appear to be open it would appear to be set to be opening on the cash trading even lower yet again But notice how this yellow line here the one where they will be average and this blue line here The 50 moving average both seem to be coinciding in around the same area in around 2937 38 so These we can see on a few occasions that these metrics separate times have acted as support or actually decent enough support for the S&P So it's likely we could see a bit of a balance it around here We might have some fresh buyers enter the fold in this zone just because they've seen an active support in the past And especially we have the two metrics converging in top of each other So if we can hold above this metric we could be looking at retesting The big psychological number of three thousand mark and if you get beyond that we could really keep looking at retesting there is red line here the tune of the moving average 3091 and then if you go beyond that you could be looking well heading back towards just north of the levels We saw on Friday back towards 3100 and if you take that out, of course Then we'll be looking to To retest again the levels seeing at the high scene at the beginning of the month in around Tuesday the 8th Sorry Monday the 8th and Tuesday the Tuesday the 9th of June But if you do have a size of break back below below the 50 moving average at critics down towards this is over here Download 2,800 or potentially even lower. I'll see that down to the low scene on the middle of May in a 2,766 Now talked about how the US dollar was doing fairly well and recently enough the greenback has actually been acting as fairly decent As a fairly popular flight equality play, you know, we talked there about how stock markets in the UK and the US are racking up Multi-month highs going into early June. That's when the US dollar was underperforming So that that's hence why the US the euro was gaining ground But since then we've seen a bit of a bounce back in the US dollar and therefore we see a bit of move to the lower It would be the downside in you euro dollar and also pound dollar what you come up to in a second But the wider trend with the past few months is still very much to the upside on euro dollar So I think while we get while we hold above this note here in around the one spot 12 The wider upper trend is likely to remain intact. I will keep looking at I'm retesting the one of 14 area or just north of it the highest year in at one spot 14 22 And if you go beyond that, we could really get retesting the highs set in early March in at one spot 14 95 but if you do have if this Dot if the dollar is positive move continues and we see no further further declines on the in the euro We could look at me breaking through one 12 and head back down towards this red line here The turn the movie average and that comes in the play In at one spot 10 23 are you know one spot 10 23 is a truly moving average one 10 itself Is it would be a in a psychologically important metric for you a dollar? So that entire zone could act to support and we can see in a few occasions that that area actor at resistance in the Late May and you know once again if a metric has been important in the past It makes it more likely to be important in the future, but although there are no guarantees Take a look now at the pound versus the US dollar Well, that's still on your dollar back to pound dollar again. It's a similar situation whereby the Pound while the dollar was soft the power is gaining ground But now that the dollar has turned around and we seem, you know, but a second pressure come on to the bottom We seem pound come under a second pressure So we can see here basically from the middle of the month so it's pushing higher between late between mid-may and the into Into early June, but the last few sessions been moving lower or below the third movie average, you know one spot 26 81 Creeping if it lower, we haven't gotten this low as the fifth movie average for that area has been a zone of consolidation that we've seen on a few occasions that there they're about area act as Support in late May, so it's possible that we could see support come into play in at one spot 24-17, you know that metric is active support pass or might active support in the future And that it that is the case we could be looking at heading back towards the 126 area and then up towards the Trinity moving average unit 126.81 and if you've all been on that we could be looking at retesting the high set And you know that the first, you know 10 the first week or 10 days of June in it Just north of one spot 28 128 13 highs 10th of June and if you go beyond that we can then be looking heading towards 130 But if we do have a big break below the fifth movie average We could be heading back down towards the kind of 122 zone And then if you go below that you could be looking at retesting one spot 20 76 Which was the low posted it could have mid to late May Look at a couple of current look at a couple of commodities now starting off with WTI the July contract So similar to stocks go and similar to stocks all of a sudden decent run because of the Because of the perception that you know the economy is a reopening therefore demands going to be on the rise We've also had OPEC plus Introduced quite steep production cuts largely which which which have been extended by one month top of that So we we saw a decent move In the oil market all all the way from the month of May and that continued on into early June So unless you set basically a three-month high But now that we have renewed fear is about the health crisis Oh, are we gonna have another round of COVID-19 cases if the health crisis really takes off again Our governments go to slow the rate of which they're reopening economies and if that is the case Are we going to see it dip in the demand for oil? Use anybody who is our only long oil who go out a while back to customer their positions That's precisely what we've seen so we've been drifting lower the past few students WTI the July contract If it continues to move lower support could commit to play in this area here south of 132 And if you go beyond that we could see support coming to play from this blue line the 50 moving average just north of 30 bucks per barrel But if you do look to get a rebound from here, we could look at retesting the high scene in early June in at 40 43 take a look now at Brent crude the August contract similar situation had a nice rally between late April into early early June It racked up a three-month high, but it's been drifting lower ever since similar situation So if you look to get it drift a bit lower from here support could commit to play in around 36 dollars a barrel or the just south of it here in around in around Well, just south of 34 dollars a barrel here in around spot 33 spot 95 And then also they're there about coincides with the 50 moving average Which comes to play just north of 34 bucks a barrel So this the potentials is all of support should we see the oil market drift lower from here And if you do have a fairly decent break below that we could then be lucky hanging back down towards the low scene in mid-June Apologies in mid-May rather mid-May and that comes to the place south of 30 bucks a barrel So what you know once again 30 bucks a barrel and Brent will be kind of big psychological number So the fact that the the lowest scene in mid-May will also gonna be potentially be a fairly significant area But keep in mind the trend has been positive for the last number of weeks And if you do look to kind of press a wire from here We could be looking at retaking 40 bucks a barrel It's like a large number and if you go beyond that you could be looking at testing the highs on scene on the 8th of June In around 43 dollars and 41 cents Now lastly, I'll take a look at the gold market now gold has been a bit of a funny one recently Gold tradition as well whenever stocks are tumbling Fight quality play and all that But because gold is quoted in US dollars The inverse relationship between gold and the greenback has been kicking in as well so Gold is doing reasonably well But what I'm gonna do as well as it should be because we're not seeing more and more funds going to the US dollar We're just getting started Oh Gold and we're not too far away We're about 45 dollars away from the highs of May keep in mind that level of it around 17 is 65 was as high as that about seven and a half years So the gold market is not quite strong But to be honest, it's been reasonably range bound the last the last few months So but if you get a break above 1765 high highs in May that could look that could potentially get a pay of the way for 1800 to be tested On the flip side of the divide if we do see kind of decent move below the fifthly movie average It could take us back down towards the low scene in early early June. I was in around 1670 But given that those that level with that given that those levels were set at a time When stock markets are doing really well, and there was and you're gonna almost very few peers in relation to COVID-19 We have to kind of almost from a health point of view You can go set the clock back to a point where chairs are no longer fearful And even then the gold market didn't really move a whole lot away from the from because like a lot She bought 17 hundred dollars an ounce level Thank you for listening I'll have a video after the week in relation to the chart of the week video. Please tune into that Stay safe. Have a good trading week and good luck