 Good afternoon ladies and gentlemen welcome to CMC markets on Friday the 7th of September and This month's non-farm payrolls webinar in this case. It's the August payrolls report before I get started I have to Do a couple of housekeeping rules a couple of risk warnings for You to digest Anything that you hear on this webinar should not be construed as trading advice because it isn't Adulting what I want to what I'm hoping to do is outline the key areas of support and resistance trend lines potential turning points in the market in the aftermath of This afternoon's payrolls report of which there are two We have the US jobs report for August And we also have the Canadian jobs report for August And I think both these reports are going to be important in the context of when the next rate rise is coming from Not only the Federal Reserve, but also from the Bank of Canada because I think If the Federal Reserve hikes rates this month, which is still pretty much priced in it's still a pretty much a done deal The big question and after that is whether or not the Bank of Canada will follow suit given the concerns that there are about a potential NAFTA deal But being played out or not. So lots of lots of fundamentals Overshadowing today's payrolls report by and large the economic data. We're out of the US has been Pretty well positive across the board Certainly, we've seen significant divergence between European equity markets and US equity markets, but it does appear I think to be some signs that potentially US markets may be looking to be slightly exhausted They appear to be running out of steam this week. We've seen new record highs for Apple and And Amazon Amazon briefly became a trillion dollar company the second company to do so Apple still remains a Trillion dollar company and Apple's got a very big event next week a a release date for Range of product upgrades And that's on the 12th of September. So for all you Apple fans that should be fairly that should be a fairly interesting day in The context of the next move in the share price. I'll talk a little bit about that later on If I have time but the main focus today is going to be on the US payrolls report For August now, let's look at what we're expecting for this report I think the headline number is less important really Then the actual wages numbers once again, it's all about the direction of the dollar. Obviously we've seen a Significant new lows multi-month lows for not only European markets this week But also emerging markets and yet US markets have remained largely unaffected But as I said in my lead-up, I think there is some evidence that we could be building up for a little bit of a correction on US markets And for that I'm using the NASDAQ and then the NASDAQ 100 got a nice little trend line Through here we appear to have broken it, but what we haven't done as yet has broken the 50-day moving average So I think in terms of equity market reaction to today's report the key level that I'm watching for is On the NASDAQ 100 it's the 50-day moving average because if we close below that Then I think there's certainly scope for a significant correction lower in US equity markets And one of the things I have noted over the course of the past few days is even though the S&P and The NASDAQ have made new record highs the Dow Jones has not and you know as with all technical and analysis analysts I place a great deal of emphasis around Dow theory and You know while we have seen Further advances in US equity markets I'm always a little bit suspicious that this divergence between What the US is doing and what the rest of the world is doing can continue indefinitely I don't believe that it can and ultimately there does become a tipping point and I think if we look at a weekly chart of the NASDAQ This is Where it could get interesting? potentially building up for a bearish engulfing week For the NASDAQ now the last time we saw one of them was all the way back at the beginning of the year And it did preempt a very sharp down move to the downside Before rebounding so I think even if we do get a move lower over the course of the next two to three weeks We still need to be very cognizant of the fact that we could get a very sharp snapback now got the economic calendar with the various updates that I'm particularly interested in and in this case it's the The these four here non-farm payrolls Average earnings the unemployment rate probably less important Than the actual wages numbers and obviously the headline number for the the Canadian jobs report So I'm keeping an eye out on the NASDAQ in particular for a potential move next move on US markets we can also see that On the S&P 500 as well This was the previous peak from earlier this year. We've broken above that 2875 really, I think we would I would be expecting a concerted move Below 2870 for us to really start to push back down towards the 50-day moving average again. It's very very difficult To establish with any degree of certainty as to whether or not we're going to get further losses for US markets on Against a background of a fairly strong dollar, but what I have noticed over the past few days is for all this talk of a stronger dollar and I think this is important because I think it could have a Significant it could it could have a significant effect on where a marriage emerging markets go next They've been under pressure on as a result of all these trade concerns and what have you but this is a dollar index now the dollar index would appear to be showing signs of exhaustion exhaustion easy for me to say But I'm looking at this chart and I'm thinking is this a little bit of a potential reversal building up on the dollar index because If I draw or a link these lows through here, it could conceivably argued that There's a little bit of a regular head and shoulders building up here. This is the left shoulder here This is the head. This is the right shoulder Okay, you can it's open for debate as to whether or not you argue that this is also a left shoulder But ultimately, I think what I think we can determine is this trend line here from The June lows, I think it's going to be very very important in the overall context of where we go to next now This week's ISM surveys that were universally positive in the context of All the main data points going forward new orders Employment The headline number and what have you but what was quite interesting was the prices paid actually softened from the July readings for not only Manufacturing but also for services as well And I think the Fed has the Federal Reserve is going to have significant a number of concerns About first and foremost the strength of the dollar but also perceptions of the speed of Their rate-hiking cycle so while today's numbers I don't think will have any bearing on when the Fed raises rates this month, and I still think there's Pretty much a 95 to 100% possibility that that will happen This data could determine How the markets price the prospect of a December rate rise And I think in that context wages will be very very important because for the past three to four months Wages have gone pretty much nowhere. They've been stuck at 2.7% Inflation on the feds measure is 1.9 to 2% so we're getting very meager real wages growth It's it's there, but it's not particularly Noticeable And I think what we want to see is an acceleration in that Given that this week's ADP report was fairly weak It was around about 150 160 and that in itself is not so much of a surprise if you've got a tight labor market Then you're not going to be able to fill as many jobs as you like Which then means that if you want to fill those jobs you're going to have to start paying people more money At the moment the wage growth Hasn't really been filtering through If it does though and we get a decent wages number then I think this trend line support here will hold On the dollar index and we'll get a rebound back to around about 95 and a half 96 we're around about 95 at the moment so In the overall scheme of things it's going to have to be a pretty poor Number pretty much across the board particularly on wages for the dollar index to break through this downtrend like this up trend line here So how does that affect? Euro-dollar or we can see that quite clearly here There's a good resistance at around about 116 and a half and the solid support around about 115 Now we're stuck in the middle at the moment and we're not really going anywhere So it's very difficult. I think at the moment to really determine one way or the other which way we're going to go We're stuck in a 50-point range for Euro-dollar at the moment decent resistance at 116 and a half If we get a weak number Weak dollar strong euro number weak dollar number then we could well push up of well of one 1650 and head back towards the range Highs of around 117 and a half, but again, we're not really going anywhere because Traders are still concerned About the prospect that the tariffs that President Trump might Be inclined to levy on the European auto sector. We've already seen in the data this morning out of Germany That trade concerns are starting to have a significant slowing effect Not only in the German economy, but the European economy as a whole if you look at euro-dollar on a slightly Long-term scale. You've also got a similar sort of thing here with respect to a potential upside down head and shoulders But again For me, I think it's really messy and it's not really conducive But certainly the neckline comes in around about 117 40 117 50 If you assume that this is the left shoulder This is the head and this is the formation of the right shoulder We did break out of this triangular pattern earlier this year. We only reached our I have won 1285 target. We didn't reach our minimum price objective of 113 So at the moment that the outlook for euro-dollar Remains pretty mixed and pretty difficult to Judge which brings me to cable a Cable is One of those we're right on a very big resistance level at the moment. We've got the 50-day moving average We've spiked above it, but we haven't closed above it and we've got these peaks here around about 130 40 130 50 so we could squeeze through 130 50 on a Poor payrolls number on a good payrolls number or a wages number We could come all the way back down to these lows that we saw around about 127 85 Yes, earlier earlier this week. This is a daily candle chart We can see quite clearly that there's a decent area of resistance between 130 40 and 130 60 so it's going to be a have to be a particularly weak number For the cable to move back towards this trend line resistance from the highs that we saw in May So even if we get a weak nut dollar number I really don't expect the pound to move much above The top part of this line that we have here before we go anywhere I'll just quickly look at good dollar CAD because it's the canadian jobs report as well We've broken out of this downtrend line here From the highs that we saw back in june We're now looking to retest the 50 day moving average So I think with respect to dollar CAD if we do see a retest of the 50 day moving average down here We could potentially get a rebound particularly if it's a weak u.s jobs report on a strong canada jobs report It was a strong canada jobs report last month The headline number was 54.1 But what was notable about that jobs report was the number of part-time jobs That were added to the overall number So it wasn't a particularly good number when you actually dug around into the internals Most of the jobs gains in canada were part-time jobs. So In terms of non-farm payrolls um expecting 191 You know again if we if we come in much below 150 I'll be surprised if we come in around about 220 230 again I I wouldn't be surprised either Also, don't be surprised if we get a significant revision in July. Ultimately for me. It's all about the wages numbers The dollar's looking a little bit soft So if they do come in on the soft side, I would expect an initial sell-off But I don't expect the dollar to collapse I would expect to see a little bit of a push higher in euro dollar And cable in the event of a week's a week u.s jobs report. So Let's look at the numbers fasten our seatbelts and get ready for the numbers 201 On the headline jobs of 2.9. That's a very positive Average earnings number very dollar positive Not surprisingly, you're probably going to see The pound come off quite aggressively. You're a dollar come off quite aggressively So that 2.9 number very dollar positive going to push the dollar significantly higher And mean that ultimately I think we could potentially have seen the highs of the day Not only in euro dollar, but certainly in the context of the pound against the dollar It's also I think probably going to be a little bit of A negative for emerging markets because ultimately it will make A Much more likely that Fed is going to go in december as well as september and that canadian jobs report is awful minus 51.6 Sorry, I got there in the end and unemployment's gone up to six percent. So Poor canadian jobs report decent u.s jobs report It looks to me as if dollar cad's probably going to go up and retest 132 the highs of earlier this week over the course of the rest of the trading session And and head higher so 3.9 unemployment rate u.s revision for The previous payrolls report for the u.s is down to 147. So a slight downward revision there So again, the headline number is not really amounting too much. It's this bad boy here 2.9 percent Finally we're starting to see tightness in the labor market spilling over into higher wages And the hope is that that will obviously manifest itself in uk wages next week. So Ultimately that means a higher dollar. Let's have a quick look at the dollar index not surprisingly The dollar index has gone positive for the day It's also going to be fairly positive for dollar yen If we look at dollar yen here We can see that we've got fairly decent support on the dollar At around about the 110 and a half layer up 110 and a half area And again here in the dolly yen I look at kumo clouds on dolly yen. I find them fairly useful in terms of Showing when we showing me where the support and resistance levels are on the dailies So we can see from here that there's a decent likelihood that as long as we stay above This lower line in dolly yen Then we should head back towards the range highs that we've got over here If we look at the price action over the course of the past week or so on dolly yen It stayed pretty much within the cloud for all of that period when it breaks above the cloud or into the cloud Or through the cloud it generally tends to move to the other side of it. So dolly yen In all likelihood will probably look to retest the 200 day sort of the 50 day moving average Which currently runs through here And look to move back towards the round about the one and eleven a half one eleven One eleven and a half as long as we stay below one ten eighty in the short to medium term so I would I would argue that this it's a fairly fairly positive dollar figure Basically refocuses people's attention on what the Fed is going to do in december Um Going to get we're going to get a rate hike in in september. It's really a question of how many more do we get going forward This does nothing to diminish The outlook for us rates, and I think that is important What does it do for equity markets? Well, ultimately, I think potentially it's negative for equity markets because what it means is the Further tighter us further further gains in the dollar Further gains in us rates are going to increase the risks to emerging markets They increase the risk to emerging markets It means that we could well see Further losses in the short to medium term And the next level i'm looking at now on the footsie is these two Lows through here, which is around about seventy one ninety seven thousand two hundred for a move lower In the footsie one hundred looking at the german DAX Now that we're below twelve thousand one hundred on a technical level. We're really looking at this series of lows Through here that we saw at the beginning of the year in march In fact, if I change that to A line chart it'll probably give us a better indication of where the support level is And it's around about eleven thousand seven hundred and fifty eleven thousand seven hundred and eighty On a date on a daily close so changing that back there to A candle chart. There we go. Let's do that. I always use candle charts. They're always fairly useful In terms of the overall price structure um, so looking at twelve thousand at the moment For on resistance and above that twelve thousand one hundred looking while below this series of levels here for Further losses in the DAX down Towards the lows that we saw earlier this year. I don't think we're going to see that today, but certainly I think in terms of the macro outlook And the fact that president trump could well implement further tariffs And I think tariffs is going to be the thing the key thing here. You've got nefter outstanding You've got the potential for further tariffs on china You've got the potential for further tariffs on the european union And you also had those reports out this morning About the potential for further tariffs on potential tariffs on japan Now if if donald trump decides to go after japan You know doesn't leave an awful lot of room for anything else and ultimately in terms of risk I think that's going to be an under it's going it's going to be a significant negative Okay, i'm being asked about um sterling cad And sterling ozzie Right, we're right on a key resistance level on sterling cad at the moment Let's have a look at this on A daily chart Well from this i mean sterling cad looks fairly well beared. We're right up against resistance at the moment I would be I would be reluctant to sell it too aggressively ahead of the 200 week moving average, but 200 day moving average But we're still quite well short of it Um should find decent support around about 170 um If we look at a hourly chart will probably give me slightly more information Here we go nice little trend line here. Let's draw that in So it's very much by the dips on sterling cad looks a little bit toppy at these these sorts of levels um, but certainly I think in the context of Trading sterling cad at the moment I would certainly be looking to buy dips in the short to medium term for a move higher while above This trend line that we currently have Back down here around about 169 and a half I would wait for the market to come to me if i'm looking to buy these dips But certainly in terms of these highs here around about 171 we could see a few stops get triggered through here might squeeze a little bit higher Before drifting back down again looking at sterling ozzie Well, I don't like the look of that chart at all, but it does look as if it's breaking out I think with cad you've also got to basically play play in the context of the oil price And if oil prices start to drift lower that could well be negative for the canadian dollar Neff the concerns obviously notwithstanding, but um, we are We're quite we're quite near um bit of a level on Sterling ozzie here. Let's just get rid of these lines and declutter the chart a little bit And draw Some horizontal lines in through here Yeah, I mean where we are now is a bit of a level 180 170 182 It was decent support when we were trading sideways through here and through here I think if we're going to if we're going to make further gains on sterling ozzie Then we really need to push through 182 and a half one Certainly this this this peak here at 182 40 to really Bring us back Towards these highs that we saw at the beginning of the year of around about 185 But certainly the direction of travel does appear to be positive But I think we could see a little bit of selling kick in while we're below This previous peak here, which is around about 182 40 so hopefully That helps you out in some way with respect to Sterling ozzie and sterling cad Just drill it down again Again, it's a similar sort of story not unsurprisingly looks a little bit overbought So certainly wouldn't be looking to go long into the weekend on this particular On this particular chart notwithstanding the fact that we're Um We're so close to the 50 day moving average on the cable I think if you're going to be looking for further sterling gains Then you really need to be looking For a significant break through these peaks here and I'm not convinced we're going to get that today Or this or or the or this week for that matter. That's not to say that I don't think that The pound isn't going to strengthen because certainly if we look at euro sterling I think there is some evidence that we've probably seen the highs in euro sterling and could well head back lower now those of you who Um a regular readers of my commentary will know Over the course of the past few days, I've suggested that we could well head lower On euro sterling and there's a number of reasons why I've thought That um, this could well be the case first and foremost last week on euro sterling We saw a very nice bearish engulfing day Um, which would appear to suggest that we could well head back lower What was more important though is we also saw it on the weekly chart a key reversal week So we saw a key reversal day We saw a key reversal week And that would suggest to me that now having failed to move back above 40 we did we did trigger a few stops through there earlier this week Having failed to get through in 1940 We're probably going to head back Towards the 88 20 88 30 level over the course of the next few sessions We could see further sterling gains. It's a big week next week For the pound when isn't it? I hear you say Um, but it is it's we've got the bank of england rate meeting on thursday We also have the latest wages data And unemployment data on Tuesday And if today's us wages numbers are a decent indicator Then I would like to think that we could well see wage growth in the uk Start to exert upward pressure on prices, which should Should be sterling positive So for me, I think with the bank of england and wages due next week A positive surprise on wages could well exert further upside pressure in the pound After what has been a very disappointing Few weeks where the pound has slipped progressively lower Since april I do think we've seen a short term top and we could start to head back down again Certainly based on the charts the key reversal week And the key reversal day that we saw In august I've been asked about euro cad, so I'll have a quick look at that Again a nice Bit of resistance here on the 200 day moving average on euro cad Looking at the dailies Potential for a little bit of a reversal there on the daily candle What I would be looking for on this is If we look at the low here and the low here I would be looking for a move down below 152 20 To signal that we're going to probably go for a little bit of a further trip to the downside On the euro cad Certainly, I think It's giving us a number of mixed messages on a technical level But certainly I think there's potential for a bit of canada strength a bit of euro weakness Certainly, I think the economic data that we've got out of Europe would suggest that all of this stuff about the ECB Cutting back on its bond buying program and talking about the potential for a rate rise Next year The ECB is not going to be doing anything with rates anytime soon and anyone who tells you otherwise Is I think talking their book They want to be longer euros. I can't really be positive on the euro Um Only in the context of a weaker dollar. Certainly not in the context of a particularly strong euro currency um, so Euro cad looks a little bit toppy around about the 200 day moving average We can probably also draw a line a trend line through the highs the trend is most definitely down for euro cad So it's very I think it's very much a case of sell euro strength Until such times as this downtrend is broken and I think it's pretty much the same if you look at euro dollar as well Yeah, we have made a little bit of a potential for a rebound here But this the trend still remains down And while we may argue the case for an inverse heading shoulders here until such times as we see a break of 1750 The the strategy is the same by the dip on the dollar sell the euro on rallies and potentially um Sell sterling on rallies until such times as it gets above 130 and a half And then we could get a small move to around about 130 175 130 180 Next week. We've also got the european central bank rate meeting Not expecting any surprises whatsoever Out of that the tapering process is expected to start at the end of this month With a view to ending at the end of this year next week We've also got chinese industrial production and retail sales data on thursday the 14th of august Um, and actually it's friday the four. Yeah, it's friday the 14th of september for august It helps if I read my own notes correctly Chinese industrial production chinese retail sales and Chinese fixed asset investment is the second biggest economy in the world Starting to slow or continuing to slow these this this data on the friday will tell us all we need to know We also have us retail sales for august. That's also out on the 14th of september. So bank of england thursday ECB rate meeting thursday uk wages and unemployment on tuesday us retail sales on friday chinese data on friday and On the 12th of september. We've got the latest apple products launch. So all of those apple fans out there Let's have a quick look at apple's Share price got it right here Let's pull it over We've seen a nice little roll over there But look how far we are away from the 200 day moving average. There is certainly Potential for a move back towards the 20th of august highs around about 220 Which is not that far away from where we are at the moment. So Will the product launch tell us anything that we're not already that we don't already know will there be a new iphone An xs people are expect are speculating about the release of the iphone xs We may see upgrades to the iphone 8. We may well see a new apple watch And we may see some upgrades to the various ipad versions Though i think there's a good chance the ipad mini may be phased out So that's it for today And that's it for this week ladies and gentlemen unless anyone Has any other questions that they'd like to put to me um I'd like to wish you all a great weekend and um Hope uh You uh make loads of money not only the rest of the time we have the rest of the time we have today but also Next week have a great weekend ladies and gentlemen and um speak to you all soon enough I don't see you in Birmingham I'll see you sometime on the web