 Okay, very good morning Thursday 19th of December. I hope you're doing well Usual routine. I'm gonna run through a couple of the major headlines An overall opening sentiment here for the UK European session Then I'll hand you over to Sam and he can have a look at the charts for a more technical perspective but first off looking at the Well, you might have just seen there a glimpse of the headline Trump impeached by the house And as you can see on the charts absolutely zero impact as we had been saying from the beginning He is almost Certain to be acquitted by the Senate when they then hold their trial, which is Republican predominantly run There's no way that he's going to get impeached Officially in terms of exiting the White House. So as you can see on the charts Absolutely zero reaction as one would expect to that news from Donald Trump So looking else what's going on the pound actually has had a little bit of a jump higher this morning Perhaps I mean some people I've been talking to talking about just Closing out a bit of short covering going into the Bank of England rate decision. I mean bearing in mind We've had a pretty disastrous run for the British pound If we start looking at here that chart we had before and we've been using referring back to throughout the entire week Let me just Remove this so you can see it a bit more That's the the journey of the pound. Of course since the night of the UK election when we did print a 135 handle, but we've got down and pretty much found technical support yesterday The pivot level is working quite nicely with that low scene on the 12th And we just kind of went sideways there after before then just seeing a bit of a pushback probably a decent level of resistance Actually, just looking at this chart now at the R1 that does bring in a couple of nice areas of some of the election post-election price movement But also some of the support levels that were seen on the 11th and the 12th as well Before that main event So nothing really too much else behind that move. There's certainly no other fundamentals other than perhaps just a bit of Shortcovering given the depth and scope of the the plus three percent sell-off that we've had Since the beginning of the week on this pricing in the fears of a no-deal Brexit back on the table from Boris Johnson's toughening of that legislation Elsewhere equity markets pretty flat overall US 10 year just coming down to retest the low that was seen during the London afternoon yesterday 2802 gold just coming back to pivot as well So just a fraction higher in the European index futures to get things underway But as I said fairly quiet open not too much going on oil is basically flat and going sideways Very tight price action seen overnight in the Asia-Pacific session So straight into the headlines Trump Being impeached by the House of Representatives on charges of abuse of power and obstructing Congress As I said just a short while ago the Senate will hold a trial early in 2020 to decide whether the president should be convicted on these charges and removed from office, but it's almost certainly the base case scenario be that they will acquit him and So actually as I've said, I think on Monday's Outlook It's almost like that phrase from Star Wars strike me down and you make me stronger I think that couldn't be more relevant for Trump. I think this is I Don't agree with the Democrats approach with this I think all they're doing is giving more strength and more support to Donald Trump by taking the action that they're Doing Trump's gonna be Loving life at the moment and I know that sounds a bit perverse He's the only the third president in US history to have been impeached But this absolutely plays to his strengths and where was he last night? Holding a campaign rally, of course whilst they were counting the votes on Congress He was there doing his usual kind of pumping up a stadium crowd And he was saying that the impeachment shows a deep hatred and Distain for the American voters and they would pay at the election At the end of next year, of course and so again It's this it's this whole notion of global politics like with Brexit us against them People versus Parliament the establishment versus the people in the US now Trump It's the Democrats or Congress versus you the American people in your rights and look what I've done Perfect timing couldn't be better Stop market record highs at Christmas. I mean All this does to me this impeachment from the house is just further fuel what will be Just a really strong message for Trump and I think it just galvanizes his base even further And no better timing than the seasonal period of where we're at at the moment So although I know I sound like a bit of a Trump fanboy I do look at this, you know hundred percent from a strategic point of view and I think once again He and his team have played a blinder as Sam would say and Yeah, I think this just plays in his favor I don't see any risk at all from this only upside for the president the other thing, of course that I did I did tweet this Just going on this theme. I know it's a bit off Market topic, but I did see a really excellent graphic because I was looking at the stats behind the frequency of Trump tweets and Donald Trump. I'm not sure if you caught the tweet that I did he's tweeted. Well given another day now He's done north of 850 tweets 850 tweets so probably how much I would tweet over I Don't know four months five months. He's done in basically two weeks In the months of December so far, but this was quite interesting And I do think it definitely is true about how he uses Twitter as that vehicle to To create these different types of things. So here Diversion and deflection are probably two of the biggest things The other two are when it comes to financial markets. I think the trial balloon is is perfect That's when he will start Testing out the waters on the market's reaction and perception of the trade war and also the criticism of the Fed You know, how far can he push it? And then there's the preemptive framing of course, which is getting ahead of the curve And you know one of the things that I think he's being very good at is And I've said this in a few conversations to with the guys here is that I mean what what can you throw now? At Trump that could bring him down They've tried to throw the Russian thing at him. They've tried to throw now obstructing Congress abuse of power I mean from sexual harassment to racism Everything that would have downed any normal political figure He has confronted and the fact that he has confronted it so face-on He's pretty much bulletproof at the moment And and so yeah, this whole notion of the witch hunt And the more that you throw at him the stronger he becomes Like a Sith Lord as I said, so yeah, I'll move on other things that I think a warrant a mention And a few other things to be aware of we had the Bank of Japan interest rate decision last night I'm not gonna spend a great deal of time talking about this. No surprises at all. They left interest rates on hold This comes after the Japanese government under Shinza Abe have announced a large-scale stimulus So hence the kind of calls from the central bank to get the fiscal situation To lend more support given the lack of real ammunition that the central bank has now in its toolbox The BOJ did say they no longer Described overseas risks to the economy as increasing so they have kind of improved very subtly their outlook about the future But they did say significant Risks to remain so that they remain on guard so to speak They did say though that central bank that the domestic demand would be supported though by this Active government spending and to give you a bit of context BOJ officials see a sizable impact from the government spending expected to boost the economy by just short of 0.4 percentage points So that was Japan overnight, but the currency reaction Minimal if anything at all the other currency that has moved though is the Australian dollar And this isn't so much based on any update on the trade side and any potential ramifications on China This is directly the implications from domestic economic data where the Australian jobs numbers employment jumped 39,900 last month. This is employment figures that was compared to expectations of just 15,000 so more than double Expectations and if you look at your Aussie chart that will explain the little spike on the candlestick that you can see And then the graduated move we've had and we're all the way trading up at the R2 in the futures in the Aussie this morning on The back of the number so at the moment the RBA you could say justified in taking those three Step-cutting action that they have done over the course of this year But right to hold and stand pat for the moment to let That feed through into the economy and so far so good In that approach the other thing of course coming up the Bank of England interest rate decision not expecting any real Great movement on the back of this so very much so expected to hold rates Even though markets are pricing in as you can see on this graphic an Interest rate cut is the more favorable pricing by markets at the moment. You can see then when we get to really around May-June of next year an interest rate cut is priced in now. I don't forget Pricing has seen a little bit of a shift obviously since Boris has got a little bit more Aggressive we've been focusing on the pound coming under pressure, but the rates market also reflecting this and Given in mind then he's pretty much got a strike a deal in just a matter of months He's given that deadline of he's not now going to Extend the Implementation phase or transition and so hence the reason why when we gets to kind of end of Q1 beginning of Q2 You're pretty much going to know whether or not that is going to be withheld or or indeed He is going to have to change tax So all of that meaning more political uncertainty more risk to the economy and hence the reason why timing wise That's when a rate cut is priced for around that point of time for the moment Otherwise elsewhere a couple of other things that people are looking at If we go back to here, this is the Bank of England Dove Hawk Barometer if you like looking left at the doves all the way going to the far right the hawk So you can see the overall composition of course of the the members of the Monetary Policy Committee would be leaning to the left Because of the estate of the economy and the risk associated with with brexit Most importantly though, we have seen seeing a pattern of seven to splits That meaning seven to hold policy as it is at the moment, but to Saunders and Haskell Being more minded of taking more preemptive action to mitigate any ongoing downturn now Would they be right in doing that? Well inflation as we saw yesterday has been relatively steady But as you can see it has been drifting away from target at the Bank of England 2% as as general demand in the economy has dissipated with the The significance of the impact of the uncertainty surrounding our economy so things like manufacturing activity has been declining Construction the worst in a decade so on and so forth the other thing though GDP and this is looking at it on a Product rolling three months total has surprisingly held up However, you could say stagnating. I mean growth is pretty much flat lining at this moment But albeit we've managed to divert the initial dip that we saw in the in the summer but growth fairly precarious so in that Reasoning hence these two likely to vote for a rate cut again and some speculation that this chap here Flager is potentially going to join and you could have a 6-3 Split now would 6-3 lead to a big continuous set off in sterling I would say no, but if we were trading at a sensitive Lower bound level and now we've moved away from that. I'd say it's maybe a little less the case a 6-3 vote I think you would have a little bit of a downside reaction in cable But in terms of retesting the lower bound of this now quite important level of the 131 handle You've got close proximity the s1 on daddy pivots and the low on the 12th I I don't think we'd get down that low But certainly coming back to pivot which does start to encapsulate some of the Asian Pacific low I mean in the in the area prior to this this area here This is quite a good strong area of support or potential target in that type of setup So at the moment you can see we're forming a bit of a range I think that any short covering that was happening this morning is done And now it's kind of this price movement up until we get the actual announcement Whether or not we can breach that and push lower down to here You know if we got a surprise maybe if it's five four Then there's a little bit more emphasis to get back through pivot and retest down at those levels, but Other than the vote, I don't think there's going to be too much there That's going to be shocking information to be quite frank. Okay. I quick look at the calendar. What else is coming out today? Let's just have a quick look. So you do have the Bank of England retail sales report So, yeah, let's go back to that sterling chart with that in mind then What you would want to see from a fundamental perspective if you're looking at the short is given where we are at the moment We get retail sales and let's say retail sales month-to-month expected at my 0.3% that's plus 0.3% month-to-month the range on the low is minus 1.5% It's a bit of an outlier because the top end of the range is 0.7 So it's definitely someone on the street is quite bearish on that figure potentially is a bit of an outlier against the median estimate With that being said if we got a very negative retail sales I'd say that could bring us back a little lower towards that pivot and overnight top end of the Asia range and then if we got a six Six three or six five four split excuse me something as drastically dovish as that Well, then yeah, then we could get test back down in the potential breach of that level But you're looking at I would say fairly lower Probability scenarios, but again, this is what you do right as a good macro trader You should be thinking about the plausible scenarios You know, let's flip it on its head. Let's say we get a strong retail sales report Likewise, I'd be using the price action then that really defined the sell-off that we've had Over the last couple of days and then looking for where with the subsequent targets be if we were riding the move back higher And I think there's a couple of good spots that I'd probably keep an eye on so if I just get my Lips back so if we break where we are at the moment probably target these levels here So if I was gonna put circles And then perhaps up to the next level then you've got the R One and then some areas here from the previous highs that was seen before the gap up on the election So like I say, I don't really Have too much of a bias right now. I think that the no-deal stuff is kind of priced in To the point where it's reflecting Boris's legislation So I think now the data and the BOE could have some implications But you know, they've both got to go in the same direction and what I mean by that is Particularly strong or particularly weak or dovish That's what you're looking for for a more cleaner clarity and then looking to manage the trade through those technical levels Either on the up or downside accordingly Okay back to the calendar Other than retail sales Bank of England us afternoon. You've got your weekly jobless claims as per usual You got your Philly Fed number existing home sales also coming out Speakers No one no one really to be aware of but do be aware in WTI crude at around the Historical clothes later on this evening. You've got the Jan futures contract Exploration so hence the reason why on our charts when Sam's talking we're looking at the FEP contract, which is now Got the main volume Alright, that's it for me. Have a good day. How'd you ever say? Hi guys, good morning, I'm good Let's have a quick look over the deck So she's just pushing down to its lowest level of the week so far but key level has to be said going back here now to Last Thursday To the tip pretty much bang on the the S1 and that low So keep a watch on that was also the high if we had Back on the fifth of the month as well So a bit of a line in the sand that I would have marked up Today just for the decks in general, but of course just the the first 30 minutes doesn't always guarantee that the Direction is going to be that way and it is a key level of support in in what has been Relatively choppy it has to be say has to be said decks over the last month or so We had a couple of instances where it looked like it was going to break the bottom part of that range before then Eventually getting above there and then reaching a new high for the year only to now start drifting down Again, but yeah, certainly keep a watch on that and then if we put this on to the 15 minute chart You know this area is to hold and we get back above the the triple bottom from today's Two lows and yesterday's one as well Then you are looking for price to get back to 13,220 that kind of area here where we broke through So some interesting resistance points just above where we're trading key level tested on the low here now as well Has it had much impact on us equities? Not really, but you are just starting to see certainly in the S&P perhaps a bit of a trend develop from those lows of yesterday So given the time If you were to get like a 15 minute close below that maybe you would feel a bit more comfortable about Being bearish on this market down towards what has been the lower point of that range and just below there The S1 is where that comes in 31 92 So still the same levels of support below there that I'd be keeping an eye on 31 88 previous all-time high We are as you can see in a bit of a range of this week still so those lows Just after we did the briefing yesterday Held and then the higher that we were talking about at 30 202 has held as well 3200 level in in stocks or in the S&P We may well look back at this and just sort of see similar price action that we saw to the 3100 And it's not until we really get a close of the day above that that we can get a bit more excited So 30 202 and a half to the upside Still an area of resistance. You can see here some really big tests and This will be on the daily and of course any other time frame as well So keep a watch on that little intraday trend lines as well to keep focus on and then I would say 31 96 as well The impeachment and then said has not really done too much the US data in the afternoon Unlikely to move things as well I think the range bound trade from the lows is a nice one even the top part But personally I'd be looking for you know a confirmed break to retest that area for a further push to the upside But we'll see we will see it's have a look over the pound. We should have a little jump this morning And I mentioned some nice resistance points You can see that the high of the day is the high that we have from 630. Yes, say 31 65 And then even if it is to get through there, you've got some really key levels as well that I would have as points of interest to See if they can hold up. Obviously we've had a big move lower It's just incredible. That's all you could see wouldn't think the Consapish one the election, but of course no deal Supposedly is back on the table ever you think that's actually gonna happen or not I don't know. That's why I actually do think it's gonna be a good buy soon again Which is kind of what we were saying in the you know the election that we come lower to then perhaps push on I guess the timing of that could be key However, yesterday's low is that low that we had back on the the 19th and you can see just the Significance of that and quite a few pound pairs have come to an area of support Euro or Euro pound resistance where price has turned round and perhaps that is just gonna be such a good opportunity to buy Saying that if it does get below that and it could do of course from midday today Then the floodgates could open perhaps a further move lower So that is just a massive level for the day and the week That low from yesterday, which is the low from the the mortal by the afternoon. I should say Into the evening of the 12th, which of course with the general election this time Well a week ago, it's almost literally a week ago that we're exactly where we were What a difference a week makes but yet that resistance holding up for now If we if you are sure I would be looking to target, you know just around that pivot point I would say is your key level you can see the resistance held so firm here from the 230 to 215 this morning before breaking through a quarter to seven thirty one twenty eight on the futures I don't see why that can't really come into play there as well Euro yesterday Just continued to slow a drift down But you know did finish down to a level which again like the the pound found some good support You can see here the low of the yep You guessed it the 12th finding an area where the buyers came back in for this market So again really important and as we put this on to the 240 we were talking this week about the the idea that once price Develops these trends what happens when it breaks well break retest You've got to have that on as usually when this happens the euro then does drift lower And makes a new low for the year however quite a lot of the end of year reports You know coming out and saying it's gonna be the euros a year next year Which again will be interesting to say so if we do You know to put this on to the daily chart quickly before we move over have a look at gold and oil You know you still got this massive absolutely massive trend channel that we're in and yes If that breaks the upside, you know, it's not far from basically a break of 113 when that's on You know what an opportunity that could be to get long euro However, if we put this on a longer time frame and look weekly if that trend line from 2017 low breaks with the double sort of bottom if you like from September time well could be bye bye Well, we'll have to wait and see for that next year when Maybe more volume comes back into the market gold yesterday. You can see here. Just looking on 60 minute bit choppy You had the well what could probably just go down as a fat finger a big order and in typical gold fashion It retraced and where did it retrace to let's put this on to a five minute. You guessed it exactly Exactly where it was the amount of times it does this but you know, it did take a while, you know, it's what 1135 to Half-free but that has proven to be a strong resistance point So still have that mark to us back to the 60 minute now and you can have that range back on. Yes We spiked lower side still, you know have 1470 1477.4 as a level on that As well, of course Still going through the days have the trend line on from those lows of November and December if it breaks through 1490 for me is to such a key level, which I will like the idea of a winter rally above that We'll definitely take my attention if we can get a close of a day above there To you know target up towards even 1524 25, which was the first of November there quick look at oil Yes, they which surprised the market with a draw You know that API DOE correlation completely broke down so look like a in hindsight Anyway, what a lovely trade that would have been to sort of got in and obviously we found some resistance on the high of that week And that's held quite well Despite a little break through $61. So to the downside obviously pivot is important and probably more importantly 60-63 would be a level of interest that I'd have marked up and then sort of start to draw these trend lines on which you can see Well, we're all respected. Yes, they are the noon starting here on the 17th as well So keep an eye on those levels the Daxus have a quick look How that is trading on that point still holding up on that s1 it looks like We almost came down for another test of that here. We did so looks could be quite strong on yesterday's low So key point and that could determine what happens really for the morning session a break below this point here Which was the 12th around 515? Could see a quicker move down. Hope you will have a good trading date Bank of England and see On at 12 their last ever Interest rate decision of the decade witness in history. Hope you will have a good trading date and I'll catch you all in the chat