 Okay, very good morning to you. Hope you're well. It's Wednesday the 18th of November Just before I begin don't forget to subscribe if you're watching this on the YouTube channel got a brand new video We've recorded this week which we're going to release on Saturday Which is the third installment of the trading psychology series what's being led by one of our traders Tim Duggan He speaks this time to a professional high-performance Psychologist and some really great practical tips about just managing your emotional state and your mindset So I think you'll really enjoy that we're going to release that on Saturday at midday So don't forget to subscribe otherwise, let's just get straight into it and start talking about just generally what's going on this morning and Yeah, it's a relatively quiet There hasn't been one individual single piece of news that I think I can really update you on but there definitely is a few different themes That are playing out at this present point in time So right now in terms of the asset class mix and general sentiment the dollar index is a little bit softer We're down just shy of two tenths of 1% and that has helped both major currency pairs euro dollar and cable on the top left Just move up a little higher as European players have come into the market cable just surmounting It's high that was seen from yesterday's session running up to around the R1 at 30 to 84 in the futures Euro quite an initial obstacle and resistance on the upside with that R1 sitting around that 119 handle which did mark around yesterday's high as well as the worst keeping an eye on I'll come back in a second and look at the dollar index because that's it some quite interesting long term levels as well otherwise in terms of the gold market and we You know this colored line that I've had which has been a level of Relevance really going back over the period the last five or six trading sessions as an area of resistance turn support once again In the late US session when that got breached So quite a strong push on the downside where we responded down What was on today's daily pivots the S1 which was around those lows We had on the 13th on that double bottom on that session and a bit of recovery So when in the upside move now that kind of banned area there of resistance support is also Coinciding with the pivot so once again that around 82 and a half's remains quite key As a kind of main area of price point to break through on either side for the gold market in the equity market You probably would have seen yesterday then we had a negative close on Wall Street So losses were ranging in the tune of about point five percent in the case of the S&P and the Dow and a little bit more Flat across the three major indices. So the NASDAQ was also down about point three percent Remember, we had been seeing quite big divergencies where we're getting this kind of moderate rotational play where either The NASDAQ would be out or underperforming on the back of that kind of context the one story of course Which was pretty interesting. I thought on a single stock basis yesterday was Amazon Because the pharmacy chains were amongst the worst hit in terms of performance Individually in single stock news yesterday that came after Amazon which did actually buck the trend and finishing positive territory or bit Just marginally yesterday. They unveiled a new push into prescription drugs Which will offer discounts of up to 80% on generic drugs for prime subscribers paying without insurance either On its website or at more than fifty thousand brick-and-mortar pharmacy nationwide is a deal that they've done So wargreens CVS health were down close to 10 and 9 percent each respectively So, yeah pretty monumental news I think for for Pfizer as Excuse me for Amazon as they continue the kind of juggernaut that they are I heard one analyst refer to them as the death star In terms of their just overall slow takeover of everything that we sector and this just being the latest It isn't really a new idea The execution of it though and and just the aggressiveness of the discounts was really quite interesting So elsewhere Pfizer shares were down about another three and a half percent so again a little bit more realization about the kind of pitfalls after that initial positivity but also the Moderna news coming out and the kind of improvements that that latter one has made over the the competitive Pfizer product Continues to see an unwind of that again that they saw at the beginning of last week in their shares On a stimulus from where are we with that? Well speaker Nancy Pelosi and Senate minority leader Chuck Schumer yesterday asked the Senate majority leader Mitch McConnell to resume negotiations While McConnell stuck to his insistence on a targeted package Basically, there isn't going to be any stimulus anytime soon. I don't think that's really changed from the discussion points We're having yesterday, but the point is that they've now started some degree of dialogue Again as we go into what was a lot of the focus in the rundown from yesterday, which was this idea about the kind of renewed Implementation of restrictions as that economically starts to bite I'm sure that will sharpen the the dialogue on Capitol Hill going forward So not really looking out for much headway to be made anytime soon But perhaps some more progressive conversations might start to materialize looking at the equity markets Just very briefly here on the SMP I was going to stick in on it daily Because then we can see the kind of the narrative of where we've been and and where we're heading and interestingly now that previous All-time high that we printed back on the early part of September now acting on the daily candles It's quite a significant area on the pullback. You can see after the break that we had on the Moderna news and we hit the all-time high Yesterday, we bounced off that level and overnight. We've bounced off that level So really that 86 and a half is a pretty decent daily level to look out for where we close today above or below Whether or not we can continue to push on up here in the on the upside the Nasdaq It's that trend line that's been the one that's been on focus on the daily charts so If I start on the higher time frame This is that descending kind of trend line. We've been looking at ever since we hit the peak Back at the same time beginning of September. We have the Pfizer and brief breakout That's that extension on that wick on the upside as you can see but Back on Monday on the Moderna news We we failed on that daily to get above there and we failed as well on rejection yesterday So quite interesting to see here how the Nasdaq is going to perform on the shorter dated chart then That area where again, I just broaden this out a little bit From the fib retracement from the the fires of spike higher to the following day is low That area is still a pretty stubborn area of resistance on any push on the upside if that were to materialize That being then the kind of weekly range high You've also got the R1 on the daily pivots and the 618 fib retracement of that move I just spoke of so that would be quite quite key on the downside any break of the intraday low seen already as Europe has come in we've had a bit of a bounce but a breakthrough of that s1 which provided support Late into the Asia Pacific session Then probably be looking back down towards the 382 fib, which was also the low that we printed on Monday session Which would be the weekly low of course Okay Let's get into well final actually before I get into the headlines final charts I did want to look at was the 10 year because I thought the T note was quite telling really of where people's heads are at At the moment and I say that because here's the Pfizer news when it when it broke. We obviously saw kind of a deflation trade what I mean by that is this that this initial perception was so positive about a Vaccine coming out and therefore kind of reassuring that the economic recovery will take hold perhaps quicker than anticipated Obviously, this is Totally ignoring all of the other facts that we've discussed about why that's probably a little bit over Optimistic but it meant that yields rallied aggressively and the dollar rallied aggressively and that's two really important points because since that That day on the 9th the markets pretty much been continuing to reverse that initial kind of assumption And so if you actually look at the 10 year what I thought was quite interesting is now we've pretty much reversed the entire move We've got about another nine ticks or so to go this morning in terms of the 10 year We've ran into a bit of an obstacle which is quite a nice technical level here Which is if I just draw a rectangle you got those previous highs on the 2nd November The markets held up then on the 4th. It's also adds an area of support Prior to the Pfizer news coming out and then you've got the R1 on the daily pivots here, which is around 138 15 So that being said then With that unwinding obviously there's a lot of people looking at the covert developments at the moment Although equity still hold up there. Well, see looking a little bit fragile We started to see some of those restrictions getting rolled in but it does bring about then quite interesting Concept with the dollar because the dollar if anything has been re weakening and again just like Yields in the US they shot up On the back of well dollar strength high yields when the initial Kind of vaccine use came out if you look at Moderna when that came out same reaction But smaller and again this behavioral kind of play of the diminishing return of now people becoming more a little bit More educated about this vaccine use. What does it mean? What's the likelihood of it being rolled out more effectively the kind of reality check? I guess so the knee-jerk reaction has been dollar strength yield strength But it's got progressively smaller and probably I'd anticipate that to be the case going forward as we get the other updates to come But the point I'm trying to make here is there are quite key levels in the currency pairs as I mentioned both major Dollar pairs your dollar cable are moving higher this morning Aussie dollar the same It's testing up around its pivot at the moment and in the Dixie this kind of 92 92 area where we're trading at the moment 92 30 40 quite key. That was the low that we had in yesterday's session That starts to bring into play then the lows that we were trading Back just before that news broke on Pfizer Which was around 92 12 and the reason why this is quite important is Because if you start looking at the dollar index on a this is on a monthly chart So here we're basically looking at the last 20 years of price action on the dollar index If you'd actually look at that chart then at 92 25 area, which is this dotted horizontal line I mean just look at how important it's been. I mean, yes We have got lower of course back in 2018 and that in itself quite a crucial level around 88 30 You can see there back in the financial crisis and also recovering the sovereign crisis That was a peak of price activity, which doesn't line up quite nicely You can see here at around kind of 88 50 type level But here's key because that's that blue line would indicate not only was it a supportive factor back in 2016 2015 there's also key resistance in 05 04 Going back all the way to 1998 So the dollar does warrant watching one thing is is that there were some interesting comments Of course out of Jerome Powell yesterday and he was paying heed to the fact that you obviously the COVID situation Is worsening in America? His exact comments were they said the US economic recovery is likely to continue at a solid pace Yet risks losing momentum as the virus surges Power called rising virus infection rates a significant downside risk, especially in the near term He added the Fed will stay here will be strongly committed to using all of our tools to support the economy no one thing we definitely are seeing and This was kind of slightly evident in the retail sales report. We had out of the US yesterday But even more so COVID-19 concerns squeezed incomes and restricted mobility Because of all these state level restrictions that are being applied at the moment Indicates then weak consumer activity going forward Over the coming months so really November and December. We are anticipating a deterioration a lot of these macroeconomic indicators That would suggest then this kind of w-shaped recovery. I Renewed downturn after what is now this situation, of course, which is a continued move higher In the the case count and subsequent deaths in North America Interestingly, I did catch some commentary last night on Twitter It was citing the CDS the White House Coronavirus Task Force and they said that there is now an aggressive unrelenting Expanding broad community spread across the nation reaching most counties without evidence of improvement But rather further deterioration So here then Covid cases as of yesterday were just over 150,000 deaths now 762 if you actually start looking at the the seven-day average We're obviously coming up on the death side of things to where we were on the Sun Belt Outbreak on the worst period at the beginning of August So yeah, as we mentioned many times before this this number undoubtedly is going to get much worse over the next couple of weeks And so that then if you put these things together As power was indicating the emergence of continued virus Being a downside risk We already know then that that's going to impede economic activity do the Fed need to do more and if so Looking back at this long-term dollar chart does the dollar then ultimately start to break down further And if it does technically then you know, there's some scope for a decent move downward in the dollar Continuation of really what has been the trend of 2020 of course remember. This is a 20-year chart we're looking at if you just isolate this part on the right-hand side here This is the pandemic and ultimately despite some of the ebb and flow the dollar has had it's substantially weaker predominantly on the back of Very expansionary loose monetary policy coming way of the Fed and remember what that standard charted FX macro Strategists were saying that I covered on Monday Now if things get materially worse could the Fed even look to do something prior to their December meeting I think it's a little bit early to be making that those kind of assumptions But the point being is that it's going to heat the pressure on perhaps the Fed to be committing to more if that does Well, perhaps that explains in some of the re-weakening of the dollar and this key level to look out for and also the reversal In the US 10 year, which we were just looking at irrespective of the fact that equities are holding up Don't forget with equities that there's sector sectorial plays, right? So even though cyclical stocks might suffer if the pandemic rages on Ultimately those big mega cap tech names will just push on and given that they're so big from a market Capitalization point of view that will hold and support the market up. So I wouldn't be looking so much then for a kind of perfect in sync harmony move because ultimately now the sector plays in Inequities can help support it in a different way whereas you're getting that quite clear Narrative I think in the dollar and US yields at the moment. So hopefully that makes a bit more sense from a top level All right, a few other headlines for me to get you up to speed on Wanted to talk about UK COVID situation because you've had the British Medical Association of BMA They've come out yesterday or actually overnight and they've warned that lifting the lockdown on December 2nd Remember, that's where this current phase of national lockdown ends at least at this point in time They said lifting the lockdown on December 2nd without beefed up regional restrictions risked a fresh surge in infections Ministers this was in the telegraph last night when I saw a set to announce a package of post-lockdown measures next week It's again according to the telegraph. They were basically saying which could see households across England banned from mixing Until Christmas when the government aims to loosen restrictions for a few days. So the two Kind of news stories fitting in in connection with one another Basically the advice at the moment is that look just the lockdown if anything should either be extended or Come with a very subtle loosening which does mean that people should still not be able to mix Then meaning that if we can really get on top of it at the moment on the outbreak It will allow people then to have some degree of looser restrictions around Christmas of which the government already knows is going to be Problematic to probably manage as we've heard from various different surveys of Americans about what's their intentions a dividering to social distancing rules and max numbers of household gatherings and 40% said they weren't going to play by the rules, which is a obviously significant amount and Definitely Christmas will be a testing time in the UK as well Given the normal connotations of family gatherings with friends and so on Covid cases then in the UK currently just over 20,000 deaths at 598 at the moment. It's a bit of context Okay going to Talk a little bit about Brexit actually just before I move on While I'm talking about the UK and there's a couple of really interesting comments about From Tom Newton Dunn used to be the head political correspondent of the Sun. He's now at the Times Times radio actually So he's a pretty well informed chap He's kind of one of the more heavy hitters on the UK political side So he's got a pretty good ear to the ground in terms of the negotiation status of Brexit And he said that Downing Street is said to push back on the idea of an imminent Brexit deal Remember we had the Sun yesterday and then you had Bloomberg recycling that news The pound was a little bit big yesterday on the back of the idea that they might get a deal as soon as next week however interesting thing that was being brought up here by Newton Dunn was that the departure of Dominic Cummings is said to have made it harder For PM to compromise with those close to PM Johnson Who's nervous about being painted as selling out? So once more time to pass with the first or second week in December now seen as most Likely so yeah, I get that. I mean if he just cuts a deal right now. I mean Dominic Cummings is kind of one in that sense and those around him will feel that that's the case so As much as there's a bigger thing going on rather than Dominic Cummings Obviously the management of your political influence is ultimately what Boris Johnson Is right up there one of the top things on the agenda and so Again, it doesn't really track too much from the timeline that our expectations are Which is basically it's going to be between mid and the end of December when a deal gets done And so some of that latter commentary would certainly supplement that that view which I think makes a lot of sense that that Boris will want to Portray that look this isn't to do with Cummings This is all me and I'm going to push for the best deal possible and that deal gets broken at the 11th hour France in the telegraph are said to understand you have now accepted that there will be reduced fishing access to UK waters post-Brexit So again being fitting at the fact that it seems like both sides are getting a little bit closer to compromising However, there's a little bit of political management that needs to happen on the side of particularly the UK government given some of the chief advisor changes But we've had close to the prime minister a few other things this Has been out for a little while and I'm not bringing it to your attention as a piece of breaking news rather than something to just be A little bit vigilant about if you're training oil And that's in the FT. They're talking about Iran threatened a quote crushing Response to any US military strike on the country's nuclear facilities So the New York Times reported yesterday that Trump asked his senior advisors last Thursday for Military strike options that he could take in the coming weeks on some of the nuclear facilities in Iran Again, this type of rhetoric sounds Pretty sensational and you if you if you weren't I guess used to this the way of geopolitics and how it works in that region You would think wow, this is quite scary stuff It's not really that new in terms of a Kind of a use of or choice of language if you remember prior to the pandemic Iran and Iraq These types of areas were absolutely one of the main key stories of 2020 It's just been superseded by this other thing that's happening right now So my point here is the tensions are quite high It seems like Trump doesn't want to go without Making a bit of a splash because he's you know talking about the withdrawal of troops and some of these key areas in the Middle East Let's talk about a couple of departing pop shots at China in various different forms strong rhetoric against Iran He certainly doesn't want to make it easy for Biden Stepping in but the point being is the oil obviously is Hypersensitive to any type of potential supply disruption that can happen Particularly with the geography of things like the Straits of Hamoos where before we've seen captured cargo Tankers from Western companies drones shot down things of that nature. So if that did Happen not that I think you'd get a sustainable move Over the medium term because ultimately that would be derived from the demand Situation with COVID and how that's dealt with but also the supply situation with the OPEC plus deal But that doesn't mean in the interlay environment You might not get a very violent and spiking prices if that were to materialize So just something to be aware of it's kind of festering in the background And it would only take one headline to really rock the boat if you're day trading and then API crude oil infantry's these came out last night. We did see a bit of a drift low in oil But it's already been taken back WTI cruise trading pretty flat this morning. So it's not really that big a deal But we had a fairly bearish headline a build of just over 4.1 million Expectations were for pretty flat pushing a build of just like 200,000 gasoline around a quarter million to still it's draw five million Just going to have a quick chat as well I thought quite an interesting article on Bloomberg regarding the ECB and This isn't important really for the right here right now for trading strategies Intraday, but I thought it was quite an interesting concept that Bloomberg were talking about And maybe a good lesson for any of those not used to central bank communication But the article is kind of just putting together a lot of the comments That have come out recently from a variety of different central bank speakers and as I've mentioned before Really every day we've had a calendar littered with with central bank speakers and the ECB for one The headline wants next stimulus to be judged on quality Not quantity and the analysis that they're trying to put together here is the fact that if you actually look at the The pep the pandemic emergency purchase program, you know the current envelope that they're talking about Is to end with a size of one point three five Trillions and these are this is mega money that we're talking about here and at this point in time We've already only got to About half of that really less than half Because we've still got some time to run This is going to not end until way into the summer of next year and the pace of which they're going out at the Moment with buying 20 billion euros a week, but if we then start Taking this out because the market is very much expectable that this will be expanded to roughly one point eight five trillion in December So additional five hundred billion top up what the ECB Will be very mindful of is not having what happened to Draghi before Draghi had this kind of reputation of overdelivering with stimulus, but the problem that that then has is Markets start to Over-expect You know such as life and human response if I was just to give you a million pounds the first time that happened You'd be absolutely a static But if I gave you a million pounds every day, you'd soon be just a million pounds So that kind of very crude analogy really plays out in the behavioral way markets react And the ECB will be very conscious of this because it's something which did impact Draghi before in his tenancy So what they've already tried it to To kind of push people toward is that it's about the quality not just a quantity the quantity is coming But check out the quality and that being predominantly about the the length and maturity of serves the types of bombs of which They're purchasing looking to target south and flatten the the kind of long end of the curve and be more supportive in different ways Beyond that just number the worst thing that can happen is you do have highly complex very supportive overall package And people just look at one number in markets and they go no it's not good enough And then it's almost self-defeating in a way because ultimately as much as this is a physical thing buying bombs Ultimately, it's about managing confidence and if you can manage the market confidence Then that's the most powerful thing a central bank can do And so yeah, this is what this article is talking about. It's what it's quite interesting All right, let's wrap it up then what's coming out for the day. You've already had UK CPI Although the pound is trading higher this morning. I don't think it's on the back of the CPI I mean it did beat point seven against point six on a year-in-year basis But that's beside the point remember the dollar conversation. We've been having Neuro dollars also higher and that's coming up to quite a key level of resistance at the moment if then cable does continue to remain On the front foot then on a daily chart You're just coming up to around where the 11th and November high was about a week ago This is when the pound saw quite a abrupt turn around after EU-UK negotiators are said to likely miss their November deadline So we're back up to around that peak of price movement now Which was that high that we printed back on the fourth set so quite a key technical level We're only around about 30 pips away from that in the sterling future at the moment So that's out the way though But looking further forward Eurozone final CPI not important because final and it's quite old dated Figures now so looking forward to the US session housing starts building permits can inflation CPI and then you get the DOE all inventory levels Chief economist from the Bank of England speaking this morning and you got feds speakers littered in through the afternoon and evening That's pretty much it So gonna leave it at that let you guys get on with things and I wish you a good day ahead. I catch you same time tomorrow. Thanks very much