 Hello and good afternoon ladies and gentlemen to this monthly webinar, non-farm payrolls day earlier than normal, Thursday the 2nd of July because of the 4th of July holiday or the holiday tomorrow off of US Independence Day. I have to put up the obligatory disclaimer for compliance purposes so we'll quickly run through the various risk warnings for the various different jurisdictions and regions and then we can get started so let's just get rid of that, get rid of that and we can pretty much get started. So basically non-farm payrolls, every time we do one of these the focus is always on what a Federal Reserve might do at its next meeting. Obviously the last time we did one of these last month we had a very good non-farm payrolls number and it was just ahead of the June meeting on the 17th and the 18th of June. Unsurprisingly the Fed actually adjusted their growth forecasts down, I say unsurprisingly because the IMF and the OACD basically had basically pushed their growth forecasts down in the intervening weeks leading up to that Fed meeting so really for me it's basically about given a good or bad payrolls number what are the Fed likely to do in September. So I think the focus I think has largely moved away from the jobs numbers and I think unless you disagreed me Colin I would argue that it's now more on prices, it's on prices and it's on wages and I think I agree with that and also Mike I was going to say also I think that we do have to keep an eye on what's going on internationally as well with Greece and also with Puerto Rico that if there's an external event like a big debt crisis it's also something that could upset the Fed's apple cart over the next few weeks. It's more than the jobs report at this point because all the talkers from the Fed, from the speakers from the Fed, whether it was a Fisher and Powell and some of the others have been talking towards and interest rates of one to two hundred or two before the end of the year so the question what would it take them to knock it off that I think would either be jobs I think is less because they seem to be coming along reasonably well outside some kind of external event I think is the big one and you're also ready with the inflation. Yeah because I think Janet Yellen touched upon it I think in in a statement in a press conference afterwards I think a key line in that was that she was concerned that wage growth was subdued and subdued was the adjective that she used so I think that really does underscore how important the wage growth the average hourly earnings numbers are going to be and I think there'll be more focus on that than there will be on the actual unemployment rate or the actual headline number also worth keeping an eye on any revisions to previous months as well certainly in that context let me remind you of what we've seen in terms of payrolls numbers over the course of the last few months so you can see here in this left hand B column here these are the ADP numbers and as you can see yesterday we got the best number this year for ADP at 237 it's been fairly fairly average I think in terms of ADP non farms 280 in May or the expectation I think is round about 230 for June I'm lowballing slightly I'm going 207 and I know you're highballing you're going around about 250 aren't you 233 okay you can see from the numbers that we've seen in the non-farm payrolls they've been averaging quite a bit higher overall apart from in March where we saw a little bit of a significant miss but that March number there 119,000 it was revised up from 85 last month's numbers so we as I say the revisions are very important will may get revised up or will it get revised down more importantly what will the two numbers tell us bearing in mind that some of the data has actually been particularly patchy Chicago PMI for example has been in contraction for the four of the last five months so you know it's not all it's not sweetness and light with respect to US economic data there are weak patches within the economy and prices paid in the ISM yesterday which is a measure of prices charged by manufacturers remained fairly weak we expected a bit of an uptick there it came in at 49.5 so we can see that inflationary pressures continue to remain subdued and the Fed and I know I apologize to you heard this before the Fed does have a dual mandate it's very different central bank to say the Bank of England or the European Central Bank who basically just have inflation targeting they has a dual mandate for employment and inflation and inflation it's missing by a mile so don't get hung up on the fact that the jobs numbers are good it's not just about the jobs numbers it's all about the strength of the dollar so let's get started on the US dollar story so we'll start with euro dollar I was hoping to have to not have to talk about the Greek crisis but unfortunately I don't think there's any escape from it but certainly looking at this chart here we can certainly see that the euro dollar is in an uptrend obviously this is the this is the the Sunday night Monday trading volumes and I think the thing that I was noted about this was the fact that we opened on the lows of the day and basically closed up so which suggests to me that you know for all euro dollars apparent weaknesses markets are finding it very very difficult to actually push it lower and for me that is a bit of a worry either that or the market's so short that it's taking profits as soon as it sees it let's look at the flip side of that look at the dollar index the reason I look at the dollar index is simply because it's usually a mirror of euro dollar why is it a mirror because 57 55 57% of the dollar index is the euro so what I need to see here is a double break I need to see a break higher on the US dollar index and a break lower on the euro dollar to suggest that this this number this afternoon is a sustainable number to push the US dollar higher the dollar has actually risen today so I think there's an expectation that the market is front-running front-running this number which suggests that there is potential for disappointment if I may say so I'm talking about Michael if you but if you are pretty running ahead and you're not fasting that trend line then if you if you do come in week this could take a pretty sharp trend lower in a in a hurry and then the quest and the question is what is it going to take now to break that trend line and not just that first down trend line then you go to the previous high and you go across and you've got a channel there too so you're into it into a zone of congestion as it is well you also got these two we try to raise that trend line and then that low same thing and the Fibonacci there yeah you've got 50% retracement of 109.60 which happened to be Monday's lows and you also got the 61.8% retracement around about 108.45 which will happen to also be the May lows so the May lows and the June lows of both respected Fibonacci retracement levels now I know it's very counter-intuitive to think about not shorting euro-dollar but we're also above the 100-day moving average and it's not just about the euro-dollar it's also about the dollar index it's also about the dolly and it's also about the pound against the dollar so the key levels for me on euro-dollar are 110 the lows today around about 110.30 then below that 109.60 and then below that 108.20.30 but let's look at the let's look at the pound against the dollar because that's continuing to track lower it's certainly looking weak but I'm not that bearish on it and for a very good reason let's look at these moving averages here we first and foremost we've got a trend line from the lows which currently comes in around about 150 around about 155 we've also got the 100-day moving average we got the 50-day moving average and we've got the 200-day moving average and the 100 the 50 is actually crossed above the 200 that is potentially bullish golden cross but the average is pointing down so it's not the 200-day moving average is pointing down so it's not as significant a signal as it could be but the fact that it also coincides with this strong trend line here would appear to suggest that we could be nearing a key support area on the pound against the dollar so certainly I think even if we do see further declines in the pound then I think 155 1505 is likely to be a very good area of support certainly on any move lower looking looking at the four hour chart which I'm going to change this to now we can certainly see lower lower highs so I think any rally is likely to find selling interest around about 157 20 and I think that's a key area to keep an eye on so at the moment we've we're finding a little bit of support around about 155 60 I think the further area of support was a little bit lower and about 155 looking on the top side looking around about 157 20 so positive dollar number or push the pound in the euro lower a negative or disappointing dollar number you could well see a short squeeze in the pound and in the euro similar sort of story on the dolly and your favorite Bill and Ben now this is a four hour chart that I'm looking at here ladies and gentlemen look at the slow stochastic it's looking very overbought more importantly than that now that we've filled this gap from Monday morning we've got trend line resistance from the old from the highs of you know the 15 year highs at 120 just above 125 80 coming in just to just pretty much above where we are right now I'm also pushing up pushing against the top of the the cloud envelope as well so looking at this here if belly in is to go higher what we really need to see is a break above 124 this series of highs through here but also bust up through here which suggests to me that maybe again you know it's all about the numbers in the and the markets are pricing in a good number we can see certainly in the case of this dolly end chart here we're continuing to track significantly higher over the course of the last few four-hour trading sessions there I'm going to finish up with dollar CAD on the currencies because I know Colin wants to talk about that quite significant of the dollars strengthened against the Canada the Canada's weakened to a certain extent I think those GDP numbers earlier this week certainly haven't helped in terms of the Canada's they know they definitely they were very soft and they've got to people starting to think that the first time on the monthly is that the Canada could be getting hit with a recession off the oil price crash and even if it's a mild one and secondly that it could that we could still we're still looking at the possibility that the after since Norgis Bank had a month ago that the bank of Canada might have to cut rates this summer last back in January the bank of Canada cut a month after Norgis Bank did so it's people are going to be looking to the next meeting now to see if we do get another cut and that's what we've seen the Canadian dollar explode upward in the last few days so I think if you see any weakness in the dollar CAD you're going to find a significant area of support around about 125 60 simply because it was these two twin peaks here at the beginning of June we've broken higher we've ratcheted higher here and the likelihood is that while we stay above 125 60 we're probably going to hit 127 over the course of the next over the next few trading sessions certainly in the context of this particular chart here the momentum does to be does appear to be in favour of the dollar against the CAD but that that will bring us in towards this sort of area here that peak there as the next area of a resistance around about 126 70 there or there about so in terms of getting a flavour for quickly the interest rate story let's look at the 10 year note because I think that's a generally a fairly good barometer of what prices and yields could do and certainly prices have been falling the yields have been edging up I'm going to do with this one is put a little trend line in through here we had a slightly bullish candle there but we do appear to be running into a little bit of support on the prices which would suggest a little bit of a cap in terms of the yield so certainly worth keeping an eye on the floor there if we bust down through there then obviously yields are going to track higher lower lower bomb prices equate to a firm a dollar in terms of the way they react inversely to yields let's quickly do the indices while we've got a couple of minutes left because I know those of you who trade indices or want to have a look at this can have a look at the DAX first and foremost we've been trading this corridor for quite some time now in the DAX the top of the court the corridor is quite some time away we're slapping in the middle of it we're in no man's land so you know for me I'm not I'm not touching this but we do have a gap here between 11,380 and currently where we are now so we could well run higher but we could run into resistance in that gap there looking at the S&P we did get a move lower but we bounced off the 200 day moving average and the 200 day moving average is going to be key I think for an awful lot of indices at the moment the S&P the DAX the the Euro stocks 50 they're all finding support there are thereabouts around the 200 day moving average so certainly in the context of the dailies ladies and gents really need to keep an eye on that certainly in the context of this little price pattern here this is quite bullish we could we've we've come down quite a bit lower so I would expect if we do get a weak number we could well get a push higher we do have a gap through here so 2095 2100 we could well find resistance if we get a push higher in stock markets if you want to come in Colin just say so I'm going to finish up with gold because gold does appear to have actually started to track a little bit lower again that's on the back of the firm of dollar story and you can see that here on this chart we've broken the June lows and now the next area of support is going to be around about the March lows around about 1151 there or thereabouts slightly slightly below that I think it's around about 1130 let me just do this very very quickly 1143 so 1143 1145 gold prices could well find support if we get a positive dollar number okay so we've now got counting down the 30 seconds so keep an eye on this one here average earnings 0.2% non-farm payrolls 230 and unemployment 5.4% let's bring up a dolly end chart very short-term and then we can plot the then we can plot the dollar move very quickly we're already starting to front run a positive dollar number judging by that dolly end chart and I will now keep quiet and let you absorb the numbers 223 the unemployment rate 5.3 look at the average earnings numbers look that's very very weak so that's negative dollar negative dollar that was the number they were looking for participation rates the lowest it's been since 1977 at 62.6 so unemployment has fallen to 5.3 but all of that has been as a result of a lower participation rate so that for me is a fake number a very very much a fake number because basically the reason the unemployment rate is so low is because you've got a lower percentage of the population actually working doesn't actually include because you drop out of the unemployment numbers once you've been out of work more than a year so the unemployment rate is actually not a fair reflection of what the actual physical unemployment rate is in the US 62.6 I mean that is a shocking number and to my mind that is not positive that is not a positive dollar number and I think once again you know the headline number it's not about the headline number it's about average earnings it's about participation and once again we're pretty much back to square one we're now going to be working on data by data basis data point to data point I don't think on the basis of those numbers there that the Fed will be moving in September you're pretty much kill September I do too I think this that this now pretty much kills a September rate I with because that's really low the downward revision was huge which means that that last number is the last month's enthusiasm just wasn't there and and it's both that and so yeah I mean this is certainly very weak declines on the on the hourly earnings as well I mean it's just all pointing at pointing socks here so really and that's what we're going to be looking at today you can see it here in the dollar yen that's the way it's been absolutely crushed and by the way on under those I'm looking at the US 30 has jumped about 30 points on 30 to 40 points in the on this news as well about at 1700 on the Dow so we are we are definitely seeing this US markets both on the stock side and on the currency side taking this as a less hawkish Fed and the average early earnings right on the on the annualized rate has been down it's gone down from two point three to two percent let's bring the Bloomberg we can actually look at this but also the the main numbers been revised downwards as well to not point to so we've had a downward revision of May from 282 54 we've downward really revised average hourly earnings and the participation rate is lowest level since 1977 so basically all across the board it's pretty poor it's not great it's not a dollar positive story it could be a certainly a dollar it's a stock positive story because it keeps the Fed on the sidelines I think that much longer but what it what it doesn't you know it it basically helps underpin stock markets but certainly I think the stock market is struggling to make sense of it let's look at this chart here yeah I mean we've we've ratted it higher a little bit and now we're settling back down I think once US markets open in around about just under an hour we could well see the S&P start to wedge higher but certainly in the context of I think I think the key takeaway here is a weaker dollar slightly firmer slightly firmer currencies across the board which sort of does meet into that narrative that we were talking about beforehand I think sure one second just one thing I wanted to highlight with this with this bounce is you've got this channel here with a bow in and around 2060 and you're right you're still bouncing up off of that so you're right you're still looking at this overall sideways trend is still intact and you are holding the holding the bottom of it again here and with this rally you could see you back up in time talking about the flow here in March Colin yes that's actually the 2040 low and there's on then you look at how it stops up this average here near 2060 and this beginning of May low here if you drew a line across that so overall you're still in this sideways channel and you're what you're starting to work your way up within it it'll be interesting to see what it does at that little gap there at which was what just about 2090 that's a an area where you can see first resistance if that doesn't contain the rally that could swing up a little more right there where I'll just put that little circle right there that's a little gap there as a general gaps tend to get filled and there is a definite gap between this peak here around about 2092 and the lows that we saw certainly on the Friday to the Friday lows which were 2095 and we've got 2091 so basically between 2091 and 2095 there's a gap there and you would expect that at some point to get tested and filled in over the course of maybe the next day or so one thing I want another thing is that's also I think important to remember ladies and gentlemen is that the US is not in tomorrow which means that the likelihood of any stock trade is taking on significantly big new positions ahead of a long weekend and a Greek referendum are likely to be fairly constrained so I think it's unlikely that we're going to we're going to we're going to go above that gap but at the same time I don't think we're going to come crushing off either this is going to be very much a dollar for an FX move today I don't think it's going to be a a an indices move if we can look at gold well we can probably see that's probably bounced up now off the back or it's off the lows I could be wrong on that it has come a bit higher this is a one-hour chart so as we can see it's off the lows a day around about 1157 but it certainly not ripping up any trees certainly in the context of where we were say at the beginning of today second of July we were still you know we're still well down on the day so for me that's just a significant amount of weakness in the gold price which I'm struggling to play in the third to mindful that the gold is down as much as it is heading into a referendum with the level of political risk yeah no I mean that we can use dollar and everything else and you think what would be state here but it's not but I also think that the the level of risk with respect to Greece is slightly overstated which may may seem a little bit strange may seem a strange thing to say but there is no mechanism irrespective of how Greece votes tomorrow not tomorrow on Sunday to eject a member from the EU so the I think the only thing that Greece can do is default within the euro area there's so much there's so much politics involved in this Greece story that I think it's unlikely that the EU will be allowed to cut them loose even if they wanted to because you can imagine the US is you and a potential pivot to Russia or China they don't want to fail to stay on the edge of the Balkans not with what's going on in Africa at the moment and the migrant crisis that would just be a license to you know lose a license to further unrest are you I can barely hear you make Colin is that better well Michael is it better yeah sorry I lost you so you agree with you completely there's the potential here they like it that I don't think they want any of that to happen it's but you know it's reach for the stabilizers that's a that's a huge problem because it's still a country that that's incredibly strategically located and very important beyond our time and beyond and beyond this crisis and on top of that you have to think about the humanitarian crisis that's been going on for quite some time and and the implications of if they let the spiral out of control for for other countries as well yeah I think I don't think it's I don't think that disaster scenario is the practical one I don't think it would be allowed to spiral out of control ladies and gents this is just about this is about you just as it is about us so if there's anything that you want us to cover in terms of currency pairs asset prices or what have you speak up now send us a message via the chat and we'll cover it I'm going to move on to the Australian dollar now because there's certainly been an awful lot of speculation that the Australian dollar could actually start to to track higher or sorry track lower because of expectations of rba to argue further rba rate cuts at the moment big big support around about 75 90 on the daily charts we can see that through the June lows we had a little bit of a spike low at the end of June but there does appear to be a significant amount of support around about 75 90 at these current levels so again I think it's really a case of we're in a downward channel or we're in a settlement a downward downward trend if we break below 75 90 there's certainly potential if I can actually get my chart to work to actually track lower here we go there we go so let's go to the four hour chart there we go there's a lot of feedback on your line Colin can you just filter that out for me so 75 90 is the key support there and then below that you've got the April lows so I think if we get a move through 75 90 it does appear to be the way that we're tracking at the moment and then we could we'll see further weakness towards 75 30 it's one of those moves it's probably going to act it's going to act out in slow motion it's also probably been dragged down a little bit by a bit of Aussie Kiwi but overall the direction of travel seems pretty clear here every time it rallies off this key support 75 90 every subsequent rebound it's the height the height the height the highs are getting lower the highs are getting lower so maybe we could show the Kiwi dollar next and see what they were leading it lower let's have a look at the Kiwi dollar that's right here this is well I think there's no dispute where no dispute where the trend is on that one yeah but let's let's do the daily year okay draw a line right through there that is a beautiful thing that's a thing of beauty you're a chartist that is a thing of beauty and that's a 45 degree angle downward sloping just street distribution I try to line there so the interesting thing with this is like a downward escalator that is it's like a downward escalator yeah go on calling just amazing I was gonna say so we've got weak inflation and milk prices and things in New Zealand but one of the things also that gives them a lot of scope to cut is that they actually had gone ahead last year and raised interest rates by 1% when everybody else was kind of going the other way and and so they've certainly got a lot of room a lot of room for more cats which is why they're they're under performing the Aussie dollar right now but it will be interesting to see how does this what does that mean for for other countries as well because they are at least are one that's benefiting from having raised interest rates and they're now giving them the room but the so the Fed at some point needs to but but at this point it looks it's looking pretty shaky for them for September between all the all the crises in employment yeah I know the funny thing is with the states as though it's a question is now what happens if they start going off the rails they've had you bring in QE forward you do something else QE fall they kind of painted themselves in the corner well what do they I guess the question is what do they do if the US goes that gets in trouble again well yeah there is that there is that I mean people have been made a great play of the dot charts the Fed dot charts and the fact that there's potential for two rate two rate rises this year based on what we've just seen right now I think they're going to do one I think they're going to struggle to do one I just just been asked to do sterling Aussie so I will do that let's have a quick look at that this is not one I prepared earlier right well that's an interesting chart actually that looks as if it's all starting to top out a little bit you've got good area of support right through there 202 60 202 55 and this is rolling down yeah but also if you look at these things I mean to be quite honest it this does this does look a little bit toppy but having said that I mean it did this over here in February March it traded sideways for a bit and then suddenly it then after about two or three months it's it trades higher and I think certainly in the context of this year we do have negative divergence but for me these long shadows on the daily candles suggest that there's plenty of interest to buy sterling on any dips and as such I think certainly the direction of trouble does appear to be to continue to go higher while we stay above 202 50 certainly if we draw a trend line through these lows here that pretty much coincides with that there so at the moment I probably would sit on my hands but if we get a dip back to this area through here then I would certainly looking looking to be buying sterling Aussie with a stop loss below 202 right guys if you need to ask any questions Simon for example if you use the chat facility so if I just do a quick message I'm just going to chat here and then you just reply to that message that I've just sent to all attendees right okay perfect dolly in August 15th October 14th of May 15 lows close to turning on months away still mmm that's a good question for me I think I think the weaker side of the dollar story the dolly end story is at 120 180 it's these series of lows through here I think everyone thinks dolly in is going to go higher I'm not sure the yen can continue to remain as weak as it has been simply because I think Japanese small businesses are already up in arms about the fact that and it's hurting their business in terms of their import costs so direction of travel for here for me suggests that the weak side is the downside but we need to take out this 121 80 level here that's what's that's what's really I think for me holding holding it holding it up so we extend this all the way back I'm going to do right now so let me see dolly in August don't make this you're asking me to draw a trend line through the August August and October lows Simon right so it's these two here okay let's do that yeah I mean that's still quite some way away we need to get through 120 we need to get through 121 85 first Simon so at the moment we're I think we're still some way away from that as long as we stay below this downtrend line here then I think there's a good chance we can come back retest 120 180 I've heard there are a lot of stops losses below 120 180 if we kick out 120 180 then we could go for a trip to the downside and that trend line that you took you talked about right what else am I being asked yeah there isn't a participation rate in CMC markets at the moment it's one of those numbers unfortunately that has only started to become relatively important relative to the unemployment rate in say the past you know sort of six to seven months simply because it's continued to fall in the same way that there isn't there's a there is a participation rate for UK employment UK employment is a record highs it's around about 73% but again we don't have a number for that and neither does Bloomberg it's just that US the Bloomberg does have a number for the US participation rate the footsie the footsie 100 let me quickly go to that because we haven't covered that but I think it's fairly relevant at the moment there's a significant resistance level and a gap round about 66 60 at the moment so we've got resistance here why because it's basically the series of loads through here so that's going to be a bit of a resistance on the way back up and then above that we've got the 200 day moving average so this does look by and large fairly positive so I think we could get a push higher in the footsie 100 but to under you know to unwind the downward pressure we really need to see this gap filled and for the market to close back above the 200 day moving average okay so that pretty much wraps up this week's webinar or this month's webinar rather thank you very much for listening ladies and gentlemen we will be posting this on YouTube sometime in the next 24 hours hopefully you enjoyed the contents of this webinar and Colin and I would once again like to thank you guys for your feedback your questions until next month you know stay out of trouble and good trading thanks everyone for for joining us today it still looks like we have an active day of trading and and certainly next week will likely also be a busy one later this month Michael and I will also be having our analysts debates webinar so we look forward to seeing you then cheers Colin cheers Michael thanks thanks