 Hello traders at CMC Markets. Welcome to another update by RRG Research for Monday the 11th of July and I'm recording this on Friday the 8th of July. My name is Trevor Neal and I'm presenting today from London. Julius has been doing the presentations for the last two weeks and I'm very grateful for that. I was ill, I was in hospital for a bit, all right now back at work and ready to resume working with you guys and we will revert back to our weekly alternating one to the other. The relative rotation graph that we're looking at now shows the rotation of group of world major world indices, market indices sampled on a weekly basis. The big picture remains the same with many tails over inside the leading quadrant offsetting the heavyweight US indices which are tending over here in the bottom left hand quadrant. But recently the image has changed with a lot of the tails inside the leading quadrants turning south, turning downwards, in other words losing a relative strength momentum. So the downward movement is that they're still far over to the right so they will have strong relative strength but they're losing doubt rising momentum. In contrast we can see these heavyweight American indices the NASDAQ, the Russell and the S&P heading in upwards in a northeastern direction although much further to the left on the relative strengths of the ratio is weaker but they have a better direction if you like in that they have got positive momentum. Now what conclusion can we draw from this? The big picture is still for the world to be in a relative uptrend versus the US so the rest of the world versus the US is in a relative uptrend but in near term this seems to be changed. We can't yet answer the question of whether these changes are temporary and eventually the prevailing longer term trend will continue or this is the start of a turnaround and a new trend in the opposite direction. It's really too early to say that when we drill down to the daily chart we see that the movement of the non-US markets which are up in here are losing relative momentum quite clearly which was quite clearly picked up by RRG last week and that trend has continued. The leading quadrant is populated by these US indices the Russell, the S&P and the Dow and the Nasdaq. They are the ones all in the leading quadrant. The rest of the world is somewhere else and the majority of it is over less than 100% on the JDKARK RS. Now lastly, Cajunius looked at and pointed out that the Russell 2000 index, RTY index had a bullish divergence in its price chart and whereas the Dow industrial did not and he picked that up as a sort of leader and a pusher and you can see this one has the best direction here heading northeasterly so that means easterly increasing relative strength and northerly with positive momentum. The others haven't got the northeasterly direction although they're easterly here. Julius noticed that the move was broadly based and in other words the broad index of the Russell 2000 was pushing hardest up and that's a very constructive situation isn't it for the market when it's not being just pushed forward by a narrow group of 30 large cap stocks it is 2000 stocks it's a very broadly based that then you can really say the market itself is steady and the strength is coming across the board. The takeaway from this is that the broad US market seems to be catching up and potentially overtaking the market heavy weight. This message is positive for the market at least for the short moving from equities to the other big subject at the moment which is the dollar and the dollar strength and nowhere better to see that than in an RIG chart after all all currencies are already ratios. This chart is a relative rotation graph of the g10 major currencies versus US dollar moving now to the another big issue of the moment which is the dollar strength and no better place to see that than on a relative rotational graph after all currencies are themselves a ratio. What we can see here is every single g10 major currency is in the lagging quadrant down in here nowhere in nothing anywhere else but in the lagging quadrant so the message is absolutely obvious there is only one currency which is US dollar and the rest and the various degrees of performance versus the US dollar. Now this chart relative rotation graph of the g10 currencies versus the US dollars but this sample is daily so each point here is the latest point one before one before and you can see the picture here is a little bit different whereas everything was in the lagging quadrant we've got a bit more mixed everything however except for the Swiss bank is left to 100 so underperforming also in this lower time frame but the direction of the ROG plots is not all the same. I want to follow on from what Julius was talking about last week which was the important support levels that many mock and many currencies or act in particular Julius was talking about the euro so in this daily ROG chart we can see the direction of the euro is strongly downwards so southwesternly direction it's a it's a moving very weakly with poor ratio and also momentum of the ratio the gaps between the samples also wide so there's a great a great deal of speed of this momentum loss in the euro now it's got a real kick because it broke this very significant level that Julius had been talking about and I want to follow through on this and maybe look at what might happen next just before we leave this graph obviously a lot of what's going on here is the significant points giving way but look at the there is one which is currency which is not moving in line with the general direction of the others and that's the Japanese yen the Japanese yen is is moving northeasterly so this is the opposite so although it is underperforming the dollar on this daily in this daily context it is improving in its ratio and also in positive momentum of its ratio a little bit of an improvement in its position in the whole group of weak currencies versus the US dollar the Swiss franc which on the daily has been outperforming the US dollar is turning round and losing some momentum of that move and so possibly it's going to lose that position of short-term outperforming the US dollar and join the more weak all of the other ones in the weekly position of being in the lagging quadrant now I brought up the same chart as Julius brought up last week which is a monthly chart so each bar here is a monthly bar of the euro versus US dollar and he was a do that line in there that blue support line there 103 and emphasise how important this was having been touched way back here in the 90s and then consolidation here before it broke down and then three tests in here during 2016 and 17 and then retest now mostly simply 103 retested and now emphatically broken as we're training now around 101 so the support point he wanted to make from this monthly chart the significance of it now this means that everything above it and that now is decades of trading is now resistance for the euro now the 103 level as you will already as a giveaway and we've had the powerful move as you would have expected following that break out the short-term move has been powerful so far looking at the monthly MACD with the average convergence divergence we can see the MACD line is leading away powerfully down from signal line the gap is widening between the two this means that we've got increased downward momentum as we make this significant break so this really is telling us that this is another step and possibly the beginning even of another leg of US dollar where next for the euro I would say of course that one parity is a magnet it's a psychological level it to me was very different it will feel very different when we're trading the euro in cents rather than one point something I remember this back in the 90s it was a felt like a really weak and desperate and rubbish currency when it was trading below 100 but it was the movement through 100 that changed it into a sort of reserve currency and a strong currency and something you really wanted to own but other than that it was felt like it was really in a basket case currency back there in in the turn of the century and we're back to face those that area again now so we've got the parity level which I think will be a magnet for it there is also a small consolidation at 98 here which might be supported for it that's from 2002 but really the stiff support doesn't come in until right down at 98 here and so at 90 but the stiff support comes in beginning at 95 and intensifying down to 90 area from this early century consolidation down there this bottom consolidation it was a big enormous triangle when the euro made it slow and this it starts at 95 and extends and intensifies down to 93 but any rally that we see now in the short term back to the 103 level is likely to be very stiff resistance and it's very stiff selling because the resistant is so intense above I will leave it here for this week thank you for watching we will be back with you again the same time next week in the same place probably it will be Julius so goodbye for now from Julius and I at RRG research and may the trend be with you