 Good afternoon, ladies and gentlemen to this month's non-farm payrolls webinar on Friday the 4th of May and Just let's get some housekeeping out of the way first just get the disclaimers up and Up and running. So basically use your walls apply. Nothing you hear Today in the next half hour should be construed as an invitation to trade or trading advice You know levels to buy or sell or what have you? What I'm going to try and do is cover the key levels. What the risk management? What the best what best risk management rules? You should be applying with respect to your trading and hopefully try and formulate a direction for The number Formulated direction for the market in the context of the overall numbers so get that out of the way and Then we can get started so basically non-farm payrolls obviously one of the keynote announcements of any given month Last month cast your mind back. We had a very disappointing number of 103,000 Which was in significant contrast to the February number which was 313 However, I think it's not really about the numbers the payroll numbers anymore and the reason for that is obviously Unemployment is at 4.1 percent. It's at a significantly low level And when the when the labor market starts to get tight The headline jobs numbers are less important than the actual actual pace of wages growth You know if the if the labor market is starting to get tight then hopefully And labor is getting scarce Then you would expect wages to go up and that's something that I think has been significantly lacking over the course of the past few weeks and months US wages When as high as 2.9 percent a couple of months ago since then they've drifted back to around about 2.7 percent and we don't really expect that to Significantly improve despite the fact that even though the headline number. Yes, I'm last month was 103,000 The actual performance of the dollar since then as can be seen by this dollar index chart has been positive. So The headline number Really didn't affect the direction of the dollar over the course of the last month or so And that's that to me suggests that ultimately the headline number is less important than Perceptions about inflation perceptions about wages growth and that's why we've seen the breakout From these highs that we saw earlier this year now Those of you who've attended previous webinars will know that I highlighted this area through here around about 91 as a key Breakout level for the dollar index also coincided with the 121 50 level on euro dollar. Obviously that is now back in the rear view mirror As is the 91 level on the dollar index now What's particularly interesting about this particular chart here is this candle here We've seen a little bit of a reversal in the dollar at these particular Levels and does that suggest to me that the gains we've seen over the course of the past few sessions We could be susceptible to a little bit of profit-taking well I would argue on the balance of probability that is quite likely But ultimately I think a lot will depend on the headline number and there's more than that at risk today as well Because what we've seen over the course of the past few weeks is a significant advance in European equity markets European equity markets Look as if they're going to close higher for the sixth successive week in a row now a large part of that is The fact that obviously they are undervalued relative to US markets Which are fairly richly valued the earnings numbers so far this week have been very very positive And yet if you look at US markets, they have underperformed So if I look at the S&P 500 I posted a chart earlier this week on the S&P 200-day moving average as you can see from this chart here. We're right on the cusp of this Particular support level if we go back and scroll back. I'm using the new HDMI HTML5 platform You so please feel free to to try it out The URL is platform.cmcmarkets.com. It's running in parallel with the existing Flex platform. I think you'll find it's much more responsive Certainly in terms of the charting package So if we look at the 200-day moving average on the S&P we can see that around about this 2580 area is very very important. We did try and break below it yesterday We weren't able to sustain that break We've actually only closed below the 200-day moving average on one occasion We haven't been able to sustain the move But I think what's particularly interesting about this chart is every time we've tested this moving average each rebound Has been shallower now that suggests to me that momentum is starting to Tape her off a little bit and I think stronger dollar is part of that Stronger dollar if you look at US two-year treasuries they're yielding two and a half percent Now if you look at the S&P 500 and you look at the forward dividend yield for that It's below two percent. So ultimately if you hold US stocks Yes, you might you might get you might get an occasional buyback from companies So for example like Apple which I still think is fairly valued unlike some other stocks in the tech sector But relative to say for example US treasuries I would suggest that the differential between the two US stocks and US treasuries in terms of return is Fairly similar and that is starting to shift the balance of probabilities About further upside with respect to US stocks which it contrasts obviously with what's going on in European markets Where interest rates are still nailed to the floor? and European markets have actually started to Form a little bit of a base and have also broken back above the 200-day moving average particularly the German DAX now I don't expect in a significantly aggressive move higher today in the DAX I think we're in a new range the top of that range is going to be the sixty one point eight Fibronacci retracement level of this entire up move this down move here. We're above the 200-day moving average So I think any dips in the DAX are likely to find decent support around about 12,645 150 and is significant resistance above 12,800 so I think that's probably going to be the range of it for the time being In the context, I think of the direction of the dollar We saw that little reversal candle in the dollar index what I found particularly interesting was Dolly M. Now we've been in an uptrend For quite some time It's pretty much since the lows in March But what we've seen here is we've got the 200-day moving average It will just above 110, 110, 20 give or take and those of you have been following my chart forum updates on Dolly in which you can Access from here where it says forum found some resistance at 110 key resistance 200-day moving average trend line resistance behind that That trend line resistance comes in from these peaks in November So we can see that we're starting to run into a little bit of selling pressure on The Dolly in now if we change that chart to a for our chart We can see from this chart here around about 108 70 108 80 There's likely to be a decent area of support all the way through This level here we could just just below that around about 108 70 80 generally tends to be support on Dolly in so so keep an eye on that and when that when these numbers come out later In around about 10 10 minutes time. Let's go to the calendar open the market calendar here and We've got the non farm payrolls number. So what are we expecting? Well 192,000 It's in the average ballpark figure that we've seen thus far this year Since January we've seen numbers of 200 313 and 103 So we're averaging 200,000 jobs a month the ADP number has been showing similar sorts of Jobs growth. So we know the US economy is doing okay We're getting a little a little bit of softer readings in terms of the headline numbers on the PMIs on the ISMs But I think what is important is that the inflationary numbers the prices paid numbers are at seven year highs So what we're seeing is that even though we're getting softening on the headline numbers We are still seeing upward pressure being exerted on Prices and as we heard from the Fed meeting earlier this week The Fed remains on course to hike rates next month. That's a given. I think it's going to happen I can't see it not happening unless there's a Significant drop-off in the data. Let's not forget the Federal Reserve isn't the Bank of England Okay, the Bank of England is Much more unreliable than shall we say the Federal Reserve their forward guidance to be quite honest leaves an awful lot to be desired So in the overall scheme of things with respect to non-farm payrolls We're certainly looking for Around about 192, but it's this number here that I'm really interested in and it's This number here so the wages number so I'm going to be keeping a close eye on that one also going to be bringing this Non-farm payrolls number up here. I'm just drawing that and popping that into the corner there So those are the important numbers the unemployment rate. We're expecting that to drop to 4% but we also need to put that in the context of what the participation rate is doing and again These sorts of levels the unemployment rate is again less important than this number here So I got asked a question just before I came on air and it's a very good one About the cable and I talked about the break of 137 10 In various updates either on periscope this week or in the chart forums and we can see that Here this 137 10 level was really really important in the overall scheme of things with respect to the breakout because what it's done Is it's completed a potential double top? In cable now we are approaching a very very key support level here So how we react around about 135 10 135 20 will dictate How quickly We break lower towards my overall target and I still think the pound will go lower in the longer term I just think at the moment it's going to struggle to really push significantly below 135 20 and that for me is a really really big level and even if we do We could find support around about 134 80 So longer term I still think we're going to get a weaker pound on the back of a stronger dollar I'm just unconvinced that we're going to get it today But again that will depend Overall on how positive the wages numbers are I can't help Feeling that we could actually see a slightly dollar negative number Again, it's just a hunch on my part. It's not based on anything more Than my intuition with respect to the price action or the price pattern in dolly n Which appears to be showing some form of evening star Formation and evening star candlestick reversal and the fact that we're on a very very key support level on cable If we also look at euro dollar ladies and gentlemen We can also see that even though we're below the 200 day moving average I talked about this double top breakout on the fact that we're probably going to see a move to 117 80 We do have interim support 1930 So again here 1930 a very very big support level If we have a very solid dollar number, we could get a read a retest of these lows The big question is given how far we've come this week Is there enough Dollar fuel in the tank to push us through that level looking at the four hour chart looking at the daily chart Both look a little bit oversold. There is a little bit of sideways consolidation Taking place through here. I could end up with egg on my face But as I say part of the one of the reasons about being a trader is you take a calculated decision Based on the levels and the chart points available to you And at the moment the one 1930 level is a very very key support level Which means that if you're going to play it from the long side for a rebound Your stop loss needs to be below that support level. So if you're longer euro dollar You have to be your stop loss has to be below this support level here If you're longer cable your stop loss has to be below 135 Or there or thereabouts If you're looking for a rebound and if you're prepared to run 40 or 50 points Then you need to be making at least Double that in terms of your take profit one of the most neglected Parts of trading is people think so much about their stop loss They give very very little thought To their take profit. So the question I was asked with respect to cable was is it likely they will get a retest of 137? Does it happen very often? Sometimes it does. Sometimes you get a bit of a pullback Doesn't always happen that way at the moment the way that the cable is positioned I would suggest that an awful lot of people are very pessimistic on it And we could get a rebound back to this level here Would I put money on it at the moment? Maybe a small amount of money, but with a stop loss below 135, but As I say It really depends on the numbers and the numbers are out right now So I will be quiet and let us dissect the numbers And waiting 164 on non-farm payrolls 3.9 the unemployment rate. So that's much better than expected And 2.6 the wage numbers. So the wages are disappointing So again, that's potentially a little bit dollar negative. Let's just get rid of that Up there unemployment rate drops to 3.9 So at the moment the market if I had to take a punt on this I would suggest that we're going to get a weaker dollar on the back of this And it's going to be very difficult to break those key support levels on the pound and on euro dollar But at the moment the price action is going to try and push either side of the range Try and find the weakest level But 2.6 percent some wage growth they've revised the March number lower as well The under-employment rate has also dropped from 8 percent to 7.8 So despite the fact that unemployment is falling Under-employment is falling wages are not going up and that is going to be disappointing Particularly for those who think that we're going to get four rate rises this year I do not see how the Federal Reserve Can make the case for four rate rises this year still think we'll see one in june but four rate rises one in september one in december I think it's very very difficult In terms of how does this affect the s&p and the Dow? I think it's positive because I think it will weaken the us dollar And one of the reasons why the Dow and the s&p have been falling Has been because of a stronger dollar stronger dollar has been pushing down on the s&p and the Dow And what you may quite justifiably ask me why is that and essentially the reason for that is because a weaker dollar Means that overseas earnings you don't get as much a bite taken out of them One of the reasons that the dollar has been strengthening is obviously expectations of higher interest rates from the us federal reserve But if the dollar goes up s&p 500 overseas earnings Become that much less Lucrative shall we say one of the reasons why I think We saw european markets underperform and have underperformed over the past 12 to 18 months Because of the rise in the euro from 105 to 125 it's sapped the German exporters ability to generate significant profits If you have a weaker currency your overseas earnings Basically contribute much more to your bottom line Then if your currency is strong particularly if you do an awful lot of overseas business In dollars sterling and what have you so I think this number more than anything Would I think mean that it's unlikely that us markets even though they're going to probably finish lower for the week I would be surprised If we close below the 200 day moving average today But with us markets and the volatility that we've seen this week It'll be a very very brave man to really put their hat on that But I think it on the balance of probabilities I would be surprised if us markets Close below their 200 day moving averages today. Why because obviously we've also got a public holiday Over the weekend not necessarily in the us, but certainly in the uk. We've got a long weekend and certainly I think When markets return on monday liquidity is not going to be anywhere near as Significant as it would be if london were in and london is not in so I think for the moment I think we'll probably find a little bit of a retest of these lows around about 26 14 26 15 But I don't anticipate I think A retest of the lows that we saw yesterday I say it really depends on when the you when when us investors come in and Actually dissect the numbers but from my interpretation of the numbers those weak wages numbers would appear to suggest that If you're a dollar bull They are disappointing and certainly I think if you look at the two-year if you look at the us two-year treasury That is slipping lower. It's 246 43. It's down one basis point on the day If we look at it say for example over the day That's the initial reaction the yields have dropped Lower yields generally tend to equate to a weaker dollar and also Obviously tie into the fact that dollar yen It's probably likely to test the downside if dollar yen tests the downside Then the likelihood is that we will see a move higher in euro dollar and cable These numbers, you know, they are disappointing. They're not the end of the world But I certainly think on the basis of how the market has behaved this week Ladies and gentlemen, I think that we could well see a little bit of dollar weakness as we head into the weekend Euro dollar got looked to retest its 200 day moving average above 120 And the pound potentially head back above 136 tools around about 136 20 136 30 There's nothing in these numbers to justify a stronger dollar in the short term Doesn't mean that we won't get one in the longer term, but I think overall A minor dollar negative on these numbers Um being asked about euro dollar move higher euro dollar watch one watches an upside limit We've talked about this um a little bit in the preamble We've got the 200 day moving average the highs of the last two days are going to be particularly important So I think in the context of the upside I'll be looking at 120 20 120 30 in the in the short term this area here Why because it's basically the highs of the last three days if we drill down into it into an hourly chart like so We can see that through here We've had a number of attempts to get back above it. We haven't as yet been able to But certainly on the basis of this particular hourly chart here And the four hourly chart here with we're starting to trend higher We could well see a retest of this trend line here if I draw that in there Just from that high there all the way through Through those peaks through there If we break through 120 20 we could go for a little run to the top side On what I would call a little bit of a short squeeze One of the good things about um the new htmi 5 platform is something called favorites And that's this this that's this um tab here. These are the things that I use the most So rather than going into each tab I'm basically selecting the one that I want on a regular basis All I need to do is go to Fibonacci hit the star button there And what it then does is it then gets displayed in the draw tools function there. So just go there Fibonacci There it is yellow star. It's on goes into favorites and there it is. It's right there there So I've got in my favorites. I've got trend line. I've got support and resistance line I've got Fibonacci of a tracements. I've got Fibonacci price extensions Which allows me to make a measured move rejection of a typical breakout I've got my standard moving average. I have my mac d and I have my slow stochastic So I'll just turn that off Just being asked about I'm just being asked about us equity markets hitting new all-time highs Do I see them hitting new all-time highs? Honestly, no, I don't I think we've seen the highs for this year in us equity markets The only way I would revise that view Is if we break above this trend line Resistance here at the moment the momentum appears to be towards the downside So for me, I think if you base if you're basing your analysis on a stronger dollar And the dollar continuing to strengthen Then I think that's going to be a headwind for us markets. So if we do get a rebound in us markets I would be looking to sell into that with a stop loss above this trend line here I think we've seen the best bits for us markets for the time being particularly if you if you buy into You know multiple Fed rate rises this year. I I can't see I can't see the rationale behind New record highs for us markets this year slightly different view on European markets There's a slightly more of a tailwind for them But that's usually that's I think that's a currency factor as well I think the expectation has been this year That central banks are going to look to tighten policy I think that's starting to come off the boil a bit with respect to the Bank of England and the European central bank Those inflation numbers that we saw earlier this week out from Europe Not to put too fine a point on it. They were rubbish Okay, the core numbers 0.7 percent. They're just off the lowest levels in the last 10 years. So for me I think with respect to The with with respect to What your perceptions are and what the ECB may do? I think they're going to find it very very difficult to taper their bond buying program if The core CPI for the European Union doesn't start heading back above 1 percent. It's at 0.7 percent. It's only been lower At 0.6 percent back in 2008 with respect to wti This is a slightly different story again On wti the momentum favours the upside and The only way I would revise my view that we're going to see higher oil prices Is if we break back below this level here It's around about 66 dollars 75 66 dollars 80. So if we zoom that out and you can see why this number is important And this is my trusty Fibonacci retracement levels again. Let's go to the weekly chart. It's probably easier So this is the 2014 highs down To the lows that we saw in 2016. We've retraced 50 percent of that We're now above 50 percent of that And if we go all the way back and really zoom this chart out Let me just get rid of these these here if we get these here we go We can see that between 50 percent and 61.8 There's virtually nothing there's sort of what I would call is a fresh air. There's a vacuum in that weekly candle here. We dropped Pretty much 12 dollars in the space of a week The same thing applies to Brent crude. We've just got a fresh air dump between This level here and this level here. So now that we've gained a foothold above 66 dollars 80 on wti I think the bias has to be by the dip in crude oil until such times as we move back below this level here, so At the moment we're trading in a little bit of a corridor solid support around about 66 dollars 80 Some decent resistance through here, but ultimately I think that the bias for me is a test of 76 dollars a barrel on wti And 80 dollars a barrel on Brent crude It's a similar sort of chart here if we just click on that And again, we can see it's a similar the chart looks fairly similar if we do the long-term view Again, we've also seen the two moving averages crossover, which is fairly positive So oil prices aren't going to come crashing off many times soon Even though the 200 a moving average is still falling The 50 day moving average is pointing higher and we can see here again We've broken above this 50 percent level on Brent crude, which was at 71 dollars and 65 cents We've continued to maintain the foothold above that key support Key support level and until such times as the market is able to break below it I think it's going to be very difficult to make the argument that oil can go in any way but higher That's not to say that we can't come back lower eventually But the bias I think with respect to being at current levels is We could slip back down towards here But while this level here continues to support the oil price Then you're likely to get rebounds off that and a retest of 80 dollars a barrel and let's not forget also that How far we've come Since june of last year if we look at how far oil prices have come since june last year We can see that We've seen a significant significant move higher on On the oil price And we're we're quite a bit higher certainly in the context of this particular move And we're around about 50 odd percent above where we were this time June last year So you can't say that's not going to have an inflation re-effect and that's the wrong type of inflation And I think that's why I think you're finding that consumer spending is as constrained as it is you've seen it in the us You've seen it in the uk and we've seen it this morning In european union in terms of retail sales. They were very disappointing. So on wti I'm sort of I'm sort of the opinion that while we're above and brent while we're above This line over here crude oil prices I would be looking to buy any dips back to this line if we break below that line Then I would revise that opinion and it's essentially that's what trading is all about you trade around the levels Um, and then you formulate an opinion on the basis of those levels and the price action around those levels At the moment crude oil prices are in an uptrend So you're looking potentially to to buy the dips until such times that you've got evidence that that uptrend is starting to show signs of Tapering off and at the moment we're not really we're not really seeing any evidence of that If we look at gold prices, um, just to finish up again, we found decent support the 200 day moving average Um, and the oscillator is starting to um turn a little bit higher So again, you can look at the support and resistance levels It's fairly basic stuff this and this is why I like to try and keep you know my trading simple You look at the levels you then base Your risk management style on either the levels holding with your stop loss Below it and your take profit at least twice the amount of what you're looking to risk on the downside Okay, so it's 1345 ladies and gentlemen Does anyone else have any questions to do they want me to cover a market that I haven't already covered? I mean, hopefully, um, let's give you some food for thought with respect to the overall direction of the markets Um, because unless anyone has any other questions, um, I will um I'll wind this up and um, I wish you all a very Good and enjoyable long bank holiday weekend