 Hello and welcome to the Monday market update with me David Madden Today's date is Monday the 4th of February 2019 and the time has just gone 1135 GMT To be honest, it's been a fairly quiet start to do to the week It wasn't much volatility in Asia overnight this week starts off the the Lunar New Year, so it's likely that we're going to see Low volatility as China is going to be out of commission for the week And we have a major player like China only on a holiday It's unlike that. We're going to see any massive volatility traders are still digesting the the Quite strong jobs support that we saw from the US on the back and back end of last week It was a monster number that came in well above expectations But given that the December number had a major revision to the downside And there's also reports going around that a lot of government US government employees We're seeking a part-time work from the private sector to make up for the loss of income due to the government shutdown There's not a speculation that the massive number that we saw out of the rest of Friday is going to revise lower Next month the unemployment rate ticked up ever so slightly So that a participation rate and the wage figures remain silent. So it was still a fairly good report But ultimately it's not going to change Fed of Reserve's policy the US underbank in recent weeks has taken a less Aggressive and less Hawking stands and are aiming more towards a more aiming to more towards a more neutral outlook And the report regardless if you do have a further revisions in the next few weeks It's likely gonna be the case that the Fed of Reserve are gonna sit on their hands and kind of play the kind of wait and see games So that's translated into perfectly honest not a whole lot of volatility for the For this for the session in Asia that happened overnight and also for the European session that we're seeing today There isn't much of movement that being said there are still many major issues going on The US China trade dispute is still ongoing Italy's in recession There's questions over the health of the wider eurozone economy But for the time being traders Seem to be just kind of sitting on the fence at the moment, but all these issues are still ongoing There's this haven't been really kind of addressed yet So take a look at I feel the major markets now Starting off the FTSE 100 the FTSE 100 had a very good week last week And even today it managed to press on higher yet again We're firmly above the psychology important as 7,000 area. We're currently up around 7,037 we're up this this morning. We fit levels not seeing early December. So The market's moving higher. It's continuing. It's continuing the bounce back that began in late December We're pushing higher if you could hold above This region here around 7,000 the big psychological number we could look at testing 7,145 a level not seen since early December And if you go beyond that and excited to keep enough for would be this region here 7,220 it acted as support on number of occasions and also again a bit of resistance as well at the back end of last year So it could be near to keep an eye for in the near in the medium term if the market does manage to drift lower again We could see support coming to play from this blue line here the fifth and moving average which comes into play at 6,860 and a move below that my bring support into play in this area here They could at the low of arm of late the January which comes to play in a 6,732 and should we see a break below that area that will then signal a Multi-week low. I mean we could take us back down towards the 6,600 region or pops perhaps even down as low as the at December lows of 6,536 Take a look now what's going on over in Germany in the Dax To be honest, it's a bit of a bit directionless reason. He hasn't moved the whole lot in either way So it's so the Dax like the footsies had a very decent bounce back from late since they December, but not last week We did see a Bit of uncertainty There's talk that Deutsche Bank and Commerce Bank are going to emerge that didn't do the the German Dax Any favors, but then again hasn't had a major saw lot And it's really given back some of the ground that has managed to actually manage to actually get a claw back in recent In the last five or six weeks So to be honest, it's more kind of that a bit of a kind of indecision in decision crossroads and if anything Ultimately, if you hold above said the 11,000 region We could you could expect to see further gains from the Dax and I could do with the press on higher from here We could be looking at targeting this where this trend line comes into play in around the 11,500 region maybe 11,520 We take a particular trend line from the highs of June Through the highs of July and also to September. I know it isn't perfect Doesn't line up all those highs absolutely perfectly, but It's a quite it's kind of it's gone through quite a few of those highs We get this trend line here and ultimately we remain below that trend line because the wider negative trend could still be intact But but I mean but that's not to say that we made a rally towards that trend I have potentially tested again before potentially turning lower. So the near term we might see the market Head up head up towards the kind of five thousand eleven thousand five hundred region If you do manage to break above that trend line and hold above it That could be the could be the sign that the wider downward trend is coming to an end And we're looking to get a press on higher from there And we could be looking heading up towards the 12,000 mark which coincide which is not only a big psychological number But also coincides with the two-day moving average this red line here if the market fails to break above This trend line here and does manage to turn over on itself yet again and go below eleven thousand That could be a sign that the markets at the markets meet short term correction The bounce back from December has come to an end and the markets look at the turnover itself I continue in the wider downward trend that's been in play for many months So move below eleven thousand could take us back down towards Ten thousand seven hundred and eighty-five and a move below that could take us back down towards the December lows of to the ten thousand two hundred and seventy-seven I'll take a look at what's going on over in the US starting off with the S&P 500 So first things first if we take the S&P 500 on a daily chart And if you draw low from the lows of February 2016 to the lows of November 2016 we get this trend line here excuse me This is the trend line here and as we can see the trend line was well respected back in October And also in November there's a bit of a kind of a bit of trading in and around the trend line in December But notice once the market Traded below the trend line it had a couple of one last attempts to get back above it And then we saw a major sell-off So we saw a few failed attempts to get above the trend line again couldn't they would have very sharp sell-off But since late December we have seen it quite a decent bounce back Now we could see enough we can see that in mid-January The previous trend line support began to act as trend line resistance And now we're now we're actually back above the trend line We've closed above the trend line on a couple of occasions and we're just about Holding and hovering above the trend line So when a previous the actor's trend line support briefly back to the trend line resistance And now it appears as it was acting as trend line support yet again If we can hold above that trend line, which comes in the play in around 2,705 704 in around this region here If you can hold above it that could be the sign That that the the sell-off that we saw in the back end of last year has come to an end and the S&P 500 is looking to get a rebuild on the December rally and look to actually press on higher So if you could hold above it We could be looking at retesting the 20 moving average which comes to the play at 2,743 and a move beyond that could take us up towards the psychology point 2,800 and move beyond that might bring the 2,815 17 region play that was those highs of October November December We're all in around 2,800 and kind of 15 17 that kind of region So that would be quite an important area to keep an eye out for because if you take out that area Then we could be retesting the all-time highs But if the market falls back below the truth back falls back below the trend line support We could see some support coming to play and the 2,610 this blue line here. You can see that that has been acting as fairly decent support recently But if the market does matter to drop below that again And it goes on a firmly and a falls firmly back below the trend line Support we could see that this region here 2,532 come into play a support or potentially 2,438 this region here As we know from Dow theory the the averages must confirm each other So we talked about the trend line support on the S&P 500 We're not going to talk about the trend line support on the Dow Jones So if you take the daily chart of the Dow Jones and we draw a low between the lows of February 2018 April 2018 and May 2018 we get this trend line here I know it's not as good and as clear-cut as it is on the on the S&P 500 But the principle remains the same so that trend line along here acts as support In October it showed a bit below in November But by and large it acted as support in November and then once again It traded firmly below it in early December It tried on success in a few occasions to get back above it and close above it which it couldn't And then we had the major sell-off It's we could have made to late December so similar situation we saw on the S&P 500 and low on the whole it's a similar situation since late December the market The Dow Jones bounced back considerably it ran into resistance at the old trend line The old trend line support acted as new resistance And then once again the market managed to get above the trend line and as close above the trend line So if you're trading the Dow the S&P if you're trading only one of the two US indices Please keep an eye on what the other ones do because while both are above the respective trend line supports It makes it more likely that both markets will continue to push and higher It both fall back below the respective trend line Sports it makes it more likely that the market is going to turn over on itself and the wider downward trend is going to continue So if you're so while we hold above there is the the sport of the Dow Jones It makes it more likely that we're going to continue to push and higher from here head up towards the 26,000 region, but if the market does manage to fall back below the trend line support We could see support coming to play at this blue line here the fifth at the moving average Which comes to play at twenty four thousand one hundred eighty five and a move below that who bring twenty four thousand into play It's big psychological number or perhaps even as low as twenty three thousand six hundred and sixty three I'll take a look at what's going on on the gold market And like I said the Fed of reserve appear to be sitting in kind of kind of wait-and-see mode Their their tone is very different to from say October when they were clear when they were talking about They're signaling several interest rate hikes in twenty twenty nineteen now We're looking at a scenario where Bob they're probably going to be sitting on their hands for the for they can in near to medium term and That's often up the US dollar. There's been there's a fairly strong Inverse relationship between the US dollar and the gold market The gold market is the US dollar a soft and it doesn't appear as if the feds the better reserve are going to be hiding interest rates in the near term That's been beneficial for gold gold had a fairly decent bounce back beginning in October Really from mid November on the time the phase sort of change their language that we see gold press on higher at a fairly fast rate So last week we saw gold up a fresh eight month highs So the trend is clearly to the upside and the and they can momentum is clearly to the upside So what we have seen in the last couple of sessions gold hand back some of those gains So if you do manage to drift lower, we could see support coming to play in around the kind of 1200 region 12 sorry 1300 region 1298 Perhaps even slow down as 1276 more kind of recent low 1277 If you know we could see support mark a trip back to 1300 before we're looking at you know retesting the recent highs I say 1326 or Heading up towards 1350 region Even if you drop below 1300, to be honest as long as if you hold above the 1276 area That's that that was still Constituted gold being in its wider upper trend. It's only if you start heading back below the kind of 1250 region up below the 30 moving average at 1246 because then we should then Would they would begin to get worried about the goals of our trend? Take a look now what's going on in the oil market starting off with WTI So obviously WT oil markets have had a major sell out between October and made made latest late December But we could see here that the oil market has been grinding higher as we pushing higher ever so slowly But surely they've been pushing higher. We've managed to get a head up head back to levels not seen Since mid-November mid-late mid-late November. So we're at multi-week highs. That would that's what suggests that There's a bit of positivity flowing back into the oil market If we could hold above this blue line here the 50 moving average which comes into play a 50 dollars and 55 cents if you can hold above that It's likely we could see further gains in the near term You could be looking at heading up towards this area here at 58 spot 10 And if you go beyond that it could be a target of the psychology important 60 bucks a barrel But if you do manage to drop back below the blue line here the 50 moving average We could be looking at heading back down towards 47 and a move below 47 could bring the December lows into play Keep an eye on What's going on on Brent crude as well? Like I said about down theory how the average is must should confirm each other It's a similar situation in Brent crude oil whereby Brent crude oil is not too far away from From levels also last seen in the kind of mid mid to late December So if the markets are moving in the same way you can be more confident that that move is going to continue So both essentially at multi week multi month highs So the markets and in Brent crude is pushing higher If they can hold above this blue line here the fifth of the moving average which comes to play at 59 Just just above 59 dollars a barrel. It's likely we could see further gains We could be looking at heading up heading up towards The mid November high of the 68 spot 36 And it moves to the downside in double in Brent crude support might come into play in this area here in 57 spot 50 and a move below that could take us back down towards the 50 dollars a barrel region I'll take a look now at a couple of the major currency pairs Euro versus the US dollar It hasn't been the most interesting time for the currency markets in terms of actual price action Oh, there's a lot of news out there, which is interesting but in terms of price action It hasn't been the most interesting Going from the lows of mid November Broadly speaking the euro has been pushing higher against the US dollar We've seen a series of higher highs and a few higher loads as well granted. I know we there's a sharp sell-off In late in late January, but broadly speaking the markets have been highs being getting higher and the loads have been getting higher as well So if you look the press on higher from here We could be looking at targeting the 115 area or the high as 115 70 and that also coincides Roughly with the 230 moving average But if the market does manage to drift lower support might come into play in around this this blue line here The fifth any moving average which comes into play just south of 1 14 And even if you drop below that as long as we hold above the most recent lows in around the kind of 1 13 area It's likely at the wider upper trend could continue But if you do have a break a size of break below 113 that could take us back down towards the The mid-November lows of one spot 12 16 Obviously, there's a lot of news in relation to Brexit But that being said the pound is a fairly well against the US dollar We obviously had a bit the exception of this Sharp move to the downside where we had a kind of a flash crash in the currency markets in early January By and large the policy has been in a fairly steady upward trend versus the US dollar but since since basically Early December something about five or six weeks. It's fairly solid rally the markets pushing higher here We had a very hit a level not seen since mid-October Only only only last week But ever since then the market has been handing back some of the ground But notice how it seems to be kind of getting support off the tune of moving average Which comes to the play in around one spot 30 46 And if we can hold above that area or we can hold above the kind of 130 area It's likely in the near term We could see the market press on higher and if you take off the recent highs just north of 132 We could be looking at heading back up towards They get early October highs on one spot 30 to 57 or up towards the kind of 133 region I've moved to the downside well below the 130 area could take us back down towards This region in around here in the one spot 2815 area I'll tell you a quick look now what's going on in the week ahead The week ahead can be found on our on our website If you go to cfcmarkets.com under news and analysis you will find the bulk of the The the analyst content is posted to the to this section of the web of the website So taking a look of what we can expect on the week ahead tomorrow Tuesday We have the reserve Bank of Australia Meeting on Tuesday. We also have full-year figures from BP the London listed oil company on Tuesday, we've a raft of Service PMI figures the major European ones also the UK and also from the US On Tuesday, we have fourth quarter figures from the American company snap As I mentioned, we have the non manufacturing ISM figures of the US in Tuesday Wednesday, we first have figures from the British home builder bar developments Wednesday, we've also have fourth quarter figures from the US company gopro On Thursday, we have the Bank of England inflation report and also on Thursday. We have fourth quarter numbers from Twitter Some of the updates that we do for the market analysts rock from in London and around the world gets posted to the Website some of the updates that we do actually get posted to the training platform So if you click on this this under market pulse, you'll see that the second option down is insights Which is this tab of them that I have here some of the updates that we do get posted directly to insights please also keep an eye on for an insights where we have the We have we've updates of economic indicators and also some corporate earnings as well throughout the day Before I go if you have any comments to make on this video or any of the other videos We've made here at CMC markets. Please feel free to leave review and good reviews. Thank you very much