 Good morning and welcome to the weekly market update with me David Madden Today's date is Monday the 4th of November 2019 and the time is just gone 10.05 GMT It's been a fairly positive start to the European session this morning As always trade is in focus and we heard from Wilbur Ross who is the US Commerce Secretary He said he said on one hand In relation to the US China trade It's you know likely that the US or sorry karate licenses to US companies dealing with the Chinese company Huawei That's a step in the right direction for US China trade and also in relation to US EU trade you can I said is you know It's possible or as likely the tariffs in relation to EU vehicles won't be opposed So that doesn't have a step in the right direction on that front Global trade sentiment seems to be more positive and hence why we're seeing a decent push higher in European equity markets It's also worth remembering at the very back in the last week We had by and large a good set of employment figures out of the US the headline non-farm perils figure in the US came in well Above expectations the previous number was out of decent revision to the upside There's an ever saw slightly took higher in unemployment, which is near the world and wages were fairly steady. So Combination of a decent jobs in forward from the back end of last week plus positive sounds in relation to well global trade Yeah, US and China and US and the EU and I feel vouching if you can if you know If you look at the trade that goes on between the US China and trade to go on between the US and the EU Takes up a large portion of the world's trade. So really kind of a split trader traders in a trader is an optimistic mood this morning this bit there's been a number of economic indicators out of out of Europe Broadly speaking some downbeat manufacturing numbers out of the Arizona and some not so not so impressive Construction figures out of the UK, but the headline story is very much trade focused So what I'm gonna do is I take a quick look at the week ahead And then after that I will then run through some of the major equipments Some of the major markets and the week ahead article can be found on our website If you go to cmcmarkets.com and under insights under news analysis You'll find the article. So later on today. We have third quarter figures from Uber Tomorrow we have the Interest decision from the Reserve Bank of Australia on Wednesday. We have fourth quarter numbers of Paul calm On Wednesday, we have raft of service PMI reports from major economies around the world on Wednesday We also have first-half figures from M&S Thursday, we have the Bank of England interest rate meet interest rate decision and also the inflation report but keep in mind given that what's going on with Brexit and The fact that's been pushed back potentially as late as January It's early 2020 and we also have a general election coming up in the UK in December It's hardly likely back in England. We'll be doing any kind of major moves It most likely will just say that they're observing the pinnacle situation It's probably appearing for some time on Thursday We have first-half figures from Sainsbury's and on Thursday. We have third quarter numbers from acid burden so first things first I'll start off with the Indices look at a couple of currency pairs and then finish up on some commodities. So starting off with the FTSE numbers So take a look here Basically for the last month we've seen a decent move to the upside in the FTSE when on British and today We've hit a level last seen at the very beginning of October Which isn't massive, but it's nonetheless, you know, what we guys are over a highest in a month is still very significant Especially when you look at what's going on the German market and the US market So things are moving and moving to the upside There's a steady increase in positive momentum as well. So they can be more, you know It's clear that but the bulls the buyers are in control. If you do press on higher from here We can look at retesting the late September high this is old here in around 7,440 Or potentially up to this is old here 7,470. So these are the areas potential areas of resistance should the Polish move to the upside continue if you do see a move a move lower We could find some support from this blue line here. They fit the movie average We can see nicely that acted as what resistance and support not too long ago And if a metric has been important in the past it makes it more likely it'll be important in the future Although if there are no guarantees and that metric comes into play at 7,259 And any drop below that we saw like a solid acceleration in around the 7,200 area So these are potential areas for support should the market take a move to the downside Take a look what's going on over in Germany Obviously the car manufacturing sector is a big part opponent of the German economy So the news announcement that the US may not be looking to kind of have Get into a tariff spot with this with the with the EU in relation to hotels In relation to vehicles has really boosted the German market And that's why today we see the German market hit 11 last seen in June 2018 So that really tells you everything you know about about the kind of how things are going over in Germany We're comfortably above the psychological important 13,000 mark After the amount of press and hire from here you could be like you try getting this zone here in around 13,200 If you do on the other hand though do see if you happen to see a move to the downside We could find some support from 13,000 it's big psychological number, but also this area here in around 12,900 This is this zone of say 100 points 30,000 Over 12,900 the active as support And even if you drop below that this area here in around 12,800 Might act as support now, but if you're looking at you know, charting price Is by far the most important indicator that price tells you 90% of the bench basically of what you need to know But it's also just keep keeping an eye on Another indicator as well. So if you take a look at the MACD histogram the MACD Indicator you can see that at the the underlying market is moving higher clearly in an upward trend But we actually have seen fairly steady decline in parts of momentum. So the market's pushing higher So that that's really what you should be focused on but at the same time you have to be aware that It's getting it's achieving higher highs on lower momentum. So that could be a sign The mark the the buyers the bulls are kind of running out of running out of steam So we could see a bit of a pullback. So that's why I was saying that, you know, keep an eye out for 13,000 or 12,900 So we might see a bit of a pullback, but the fact that the market as it is at highest level in over a year Is it really kind of take away a message from this chart? So we've seen how the footsie Has been It's a it's a highest level in over a year on the DAX In particular like what's going on over in the US Well, it would look appear what would appear as if the US market could the Dow Jones could could potentially open at a All-time high. We saw all-time highs on the S&P 500 last week and the Nasdaq 100 on last week Not on the on the Dow Jones yet, but that could all change today. So equity markets equity sentiment Pots equity market sentiment in the US is very strong. We could be looking at opening at or near an all-time high That gives you a great clear indication of the sentiment over the US We're currently expecting the Dow Jones to open around 27,430 If you do manage to kind of open if you do manage to continue in the kind of wide-ropper trend We could be looking at targeting 27,500 to 8,000 to 7,600 If we do see any moves to the downside The support could be found in this zone here in around 27,200 Or from the kind of psychological number itself 27,000 And if you drop below that this this area here the the lows of late October in around 26,915 might act as support And essentially why we hold above this blue line here the 50 moving average which comes to the play 26,779 While we hold above that it's likely that we are going to see Further moves to the upside is and it's only really if you have a slice of break below that Because then we begin to think okay. Maybe we could speed for a bit of a deeper Deeper pullback and we could really get it back toward this red line here Which the tourney moving average and that can display at 26,262 As I mentioned a second ago, the S&P 500 racked up all-time highs last week If things continue with the way they are the US market the cash market is under way We could be looking at seeing even Even higher all-time highs So we're very much in an upward trend on the on the S&P 500 We're currently expecting the S&P 500 to open at 3,080 There they're about if you press the higher from here a community authority in 3,090 or perhaps Beyond that in the medium term up towards 3,100 If you do see any kind of pullbacks We could see some fresh buyers end of the fold as buying the dip has been a popular strategy in recent weeks and months So if we do have a move to the downside support can be found from this area here in around 3,055 down towards 3,035 so that kind of zone Of 20 points can act as support And even if you drop below that this area here this line in around 3,025 That area might act as support also and then of course even if you drop below that You did see a lot of consolidation in around the psychology important 3,000 metric I take a look now a couple of the big currency pairs starting off with the euro versus the US dollar So you can see here from late september onwards early october onwards We didn't see a fairly decent bounce back in the euro versus the US dollar And we're still very much in that upward trend But we haven't the highs of late october and early november haven't really taken up the highs of early october just yet We're not too far away from it We could be on the cusp of it and if we do press an iron from this area here We could be making a targetting 112 which kind of coincides with this red line the charity moving average And if we go beyond that we could be making a targetting this zone here the early august high in at once about 1249 If you do see a bit of a move to the downside Support could be found from it to this yellow line here. The water didn't move the average We see that actually as resistance and in resistance in august And also we can see here that we saw some Some consolidation around this not another goal So the area might act as support and that comes into play at one spot 11 23 And it's only really if you can drop take out the recent lows the the late august lows Late october lows apologies. This is early here in around one spot 10 75 So really if you break below that can help you kind of take okay, maybe My that should look to head a bit lower. I shouldn't that be the case Support could be found from this blue line here the fifth that move the average and that comes to play at one spot 10 40 Take a look now at the pound versus the us dollar so We see a massive bounce back from early september early september onwards in the british pound Days to move to the upside through september and then really and then basically the middle of october and the announcement that the british government and the eu reached a deal and then the subsequent approval and principle of that deal has really Said that said the british hound higher against the The us dollar in fact we hit a level in late october We had a five month high and even though we have pulled back a small bit and kind of Looked to move higher again. We're still very much in that upward trend And if you do manage, you're going to press on higher from here We communicate we test the one spot 30 area and if you go beyond that We could be looking at targeting the late august high or sorry apologies the early may high this area here in one spot 31 78 and if you do have Any move to the downside support you found this zone here in around one spot 28 And even if you go below that you could come into play from this red line here the during the movie average in at one spot 20 is in at um one spot 3 7 10 I took a look now at some commodities The gold market and also the the pound and also set the pound the the old market So starting off with gold we can see that gold is still very much in a software trend It achieved a six month high in In early early september and ever since then it's broadly been trading a bit to the downside But it's more kind of range bound than anything um We were comfortable just we're comfortably above the kind of psychology important 1500 Dollar mark but at the same time. We can't really get above the kind of 50 20 area We can't really just really go below the kind of 14 80 14 80 area either So we're kind of stuck in that kind of 40 point range. So if you do see a break above 15 20 We could be like you're targeting the september high which comes to play in around the early september high in around 14 35 put the uh The chart on there the bar on there And at the downside if you do have a fairly Size of break below 1500 we could be looking heavy back down towards The early august early october low in at 14 79 it's um It's not entirely surprising that we saw gold have a massive positive run for after months and months and months and they'd have Well a bit of a sideways move a bit of a kind of on an industry kind of a bit of a holding pattern um But keep in mind that it's it hasn't despite the fact that I had a colossal rally um From really kind of well starting all the way back In august had a colossal rally and loads of ground was made It's a it's a bit of a surprise. It hasn't actually given up more ground So with anything which actually talks about the resilience of the gold market You know, you know, you might you might and I think in that We could be head back towards 1400 before the wire shrink continues But we still have very much hanging around 1500. So to be honest, I found the gold market at the moment While we hold above 1500 the bias is still to the upside. So we could be like retesting 14 35 in the medium term And that's only really if you have a size of break below The early october low in around 14 59 because then we begin to think actually, you know what we could be head back down towards 1400 then What I'm now going to do is take a look at the oil markets starting off with a brink crude And then we should look to wrap things up so we can see if we draw a line between the lows of early october and then and then the lows of Up kind of late ish october you get this trend line along here And essentially while we hold above that trend line It's likely we could see you know further gains being made in the the oil markets And if we do press on our front here, we can really get directly this zone here in around 63 63 dollars a barrel and if you go beyond that you can really get targeting this red line here Which comes to play at 64 spot 78 And then if you get above that you can really get targeting this area here in around 56, sorry 65 spot 79 On the tip side if you do you might have a fairly decent break to the downside and we take out this trend line here And we go below the kind of 60 dollars per barrel we could then be looking at targeting this zone here down around 56 spot 71 That is brink crude and i'll take a look at wti Similar situation whereby since early october it has been pressing higher Once again, if you draw a line between the lows of early october and the lows of mid october We get this trend line here and notice how the market's being told to be above that For the last few weeks But we're still having really has you taken out the truly moving average this red line here Which comes to play at 57 spot 18 So that's that that could be potentially the next area For for resistance for move to the upside I think i'll be on that It could then be looking forward this area here in around 58 dollars a barrel On the flip side if you do have a very decent move lower and we take out the recent lows here We could really be heading back down toward this trend line Which you come into play in around 53 dollars a barrel and the move below that could take a set back down Towards this area here down around the kind of earlier earlier Be able to the the mid october low in around 51 spot 41 and move below that could take us back down towards The lowest seed at beginning of the month just north of 51 dollars a barrel Well, thank you for tuning in and that's all for me this week. Thank you very much