 Good morning and welcome to the Monday market update with me David Madden. Today's date is Monday the 7th of December 2020 and the time has just gone 1148 GMT and it's been a fairly negative start to the European training session Essentially the big stories of the last couple of days have been There is still no deal between the UK and the European Union in relation to the future relationship which will kick in to kick in In January so it's kind of you know, it's some people are not surprised with this others thought There was at least some sign of positive hope at the back end of last week, but There's continues to be discrepancies particularly over in the area of fishing It was announced earlier on today that if progress isn't made between the two sides That you know progress will be need to meet need to be made have been made today in order for for further talks Carry on this week. So that that's been the kind of main issue hanging over European stock markets. It's also put a lot of pressure on the British Pound not surprisingly Also playing into the mix Slightly increasing tensions between the US and China It's understood the US government is looking to potentially target a number of Chinese government officials With sanctions in relation to their alleged undemocratic actions in the Hong Kong election Keep in mind the the unemployment numbers of the the US jobs report that we saw on Friday It wasn't too hot wasn't too great But because the number itself wasn't particularly impressive that sort of spurred on talk to put a spurred on chatter that we're going that there's going to be pressure applied to US politicians to try and push forward with the proposed Coronavirus relief package of over 900 billion dollars But so that those the the hopes of a stimulus package some sort of stress package from the US are still doing the rounds So they're the kind of major kind of the themes of the session In relation to the UK EU the European Union has a long history of striking a deal at the last minute There are some people who get a bit more nervous now that you know We're in the kind of the first week of September We're not too far away from the second week of September December You know the the transition period is going to end within just over three weeks There's some people getting nervous and no real scenario is kind of you know is on the horizon Others think take the view the European Union have a history of striking a deal at the last minute So but that's likely to be the topic of the next few days to keep an eye for euros and indices keep an eye for the British pound As always with my video I will run through the major events of the week The week ahead article can be found on our website cmcmarkers.com under insights and under at latest news and analysis So overnight over the weekend We had we had some recently mixed China trade data by and large China's is emerging from the from the COVID-19 economic crisis by far the best In terms of in terms of numbers what to keep an eye for Brown foreman the maker of Jack Daniels whiskey. They have second quarter numbers coming out tomorrow This has to be can this has to be kind of rock solid confirmed a Airbnb are looking to IPO on Wednesday Which would be at Wednesday the 9th of December? We have a Bank of Canada industry decision meeting on Wednesday, too You know not not a whole lot is going to be expected on that front Adobe have a fourth quarter numbers coming out on Thursday The European Central Bank. This would be the one to kind of watch We'll have their interest rate into a trade decision meeting on Thursday And we've already had a couple of hints that the European Central Bank are looking to going to expand their stimulus package At this meeting so this so to an extent a certain amount of that has been due in the rounds So trailers be kind of big be kind of questioning what sort of additional stimulus Could we be look at look to receive to go we look to hear about rather than are we going to hear any any at all? Keep mind I'll be touching on it later on in the video, but you're all dollars been fairly strong recently something of the European Union Something the European Central Bank will not be too keen about So and the move is large to be done to do with a soft dollar rather than a strong euro But it's something that you know the European European Central Bank are luckily will likely want to address Time game with trade talks to EU summit We have a full quarter numbers from a cattle the online delivery Grocery company they've obviously had a very good run of it in the last few months because of the pandemic But if the share price has come off the boil a little just because with the prospect of a vaccine on the horizon There's kind of growing belief that more money's been there's going to growing belief that people Revered back to the high street and traditional grosses will do better in the near term Coming up also during on Thursday We have the UK industrial and manufacturing production numbers and the last big corporate event All that's big event of the week is going to be a third quarter update from Rolls Royce So as always I'll run through the major indices currency pairs and commodities starting off with the FTSE 100 now the FTSE 100 is a bit of an outlier in that It's obviously the well-known big British index But because a large chunk of the companies that are in the FTSE 100 or at least some of the very big ones Have a relatively large exposure to international markets to do a lot of trading around the world a weak pound often helps those companies So the Azure of the drinks company or Unilever the household goods company or the big pharma companies like Glaxo Smith Klein and AstraZeneca those companies tend to have a large Overstream of overseas revenue software sterling benefits those stocks So on days when sterling is getting hammered you often see a deep and move higher in the FTSE 100 So the FTSE 100 today is as you know Well head and head and nine month high on Friday. We're higher again today So we're going to kind of saw the upper trend the last few weeks and months We're currently, you know, not too far away from the kind of 6,000 600 mark You know, we're looking at levels last seen in early November. So, you know, nine month highs if you press on higher from here We could be looking at test retesting this zone here the highs of early March Which as you can see we had the COVID sell-off We have the first kind of major bounce back into this zone here before we had another leg lower So keep an eye out for this area here in around 6,891 to the upside If you do manage to have a bit of a pullback keep mind, you know buying of the dip has been a popular strategy the last few months So if you do drift lower from here, this is all here in around 6,400 could act as support And if you go below that we did see a support on a few occasions committed play in around here in around 6258 and if we go below that we could be like you can get back down towards this red line here The tourney movie average we can see it acted nicely a support in early November and that comes to the play just north of 6,000 at 6,200 and Sorry 6,024 and notice how there's a few moving averages the red line is a tourney movie average The yellow is the water to movie average and the blue is a 50 movie average and notice how they're all kind of converging in around here So that if you do have a sizable Move to the downside in the foot two hundred is likely we could see support coming at that area Just because in the last few months those metrics at various different times have been Often provided support in the past That's the thought is the sort of the outlier we take a look now what's going on over in Germany So, you know, it was not long ago at the back end of this this time last week We had the we had the DAX the germ market here Not too far away from the highs of early September so at multi-month highs keep in mind the highs that we saw in September We're basically the highs with since these highest level we saw since late February as the market was just coming off Because of the COVID-19 crisis and keep in mind before the crisis really set in the DAX is an all-time high So we're not in the grand scheme of things. We're not a million miles from north on high on the DAX The last few days, I'm getting broadly moving to slightly lower kind of rage bound I would describe it maybe a bit of bias to the downside but Keep in mind how much ground we've traveled Basically since late late October. So we're still very much in the upward trend We need to kind of snap out of this kind of zone here kind of thirteen thousand two hundred You know between there and the highs of early September. So if we do break below The highs of early September in around thirteen thousand four hundred and sixty-two could put us on track and back up towards levels last seen in late October in around thirteen thousand six hundred and forty nine there, you know, thirteen thousand five hundred thirteen thousand Thirteen thousand six hundred and if you go beyond that you can then be looking at retesting the all-time highs If we move lower from here, I think the size of break below this area We could be looking head back down towards generally speaking They're gonna thirteen thousand area at the lows of kind of mid to late November we're just north of that in around thirteen thousand thirty three And if you even move below that we could head back down towards This is over here with the moving averages are converging the fifth removing average being the blue line on the water really moving average being They've already moving average being the other line and we can see in a few occasions and the last few months Both of those metrics are very different times have acted as support and resistance not too long ago So if we do have a size of a correction This zone could act as support and if we do have a size of a correction keep mind Even if you go back if you go back down towards this zone here around twelve thousand eight hundred We'd still be in the upward trend because keep in mind We came from south of eleven thousand four hundred back in early back in late October Take a look what's going on over in the US starting with the Dow Jones So we saw record highs in the Dow Jones, you know, we're given that given where we are We're expecting the cash market once it gets open once trading begins to open around thirty thousand one hundred and ten We could be like, you know, we're not too far away from from record highs We could potentially see new record highs today, so we're still very much in the upward trend Take a look at the price action the last few days kind of solid upward trend higher highs and higher lows So we press on higher from here We could be looking towards, you know, thirty thousand two hundred three hundred four hundred so on and so forth because we are, you know If you get if you hit new record highs, you'd be very much in on charter territory Eddie moves into the downside Thirty thousand big psychological big psychological number might act as support And if you go below that we could be looking back down towards the recent lows of last Week in around twenty nine thousand seven hundred and seventy twenty nine thousand six hundred and thirty six And it's you know, even if you take out the lows of last Monday in it Twenty nine thousand four hundred sixty one would still be very much in the upward trend and a size of break below that Could put twenty nine thousand on the radar It's a fairly similar situation with the S&P five hundred in that records records they've been set recently and We're you know, we could easily potentially see further Records on the on the horizon. So if we kind of press on higher from here We could be looking at, you know, heading retaking 3700 I think the market Got up to our price got up to about three thousand seven hundred and five today But that was obviously You know before cash trading began so we're still as you can see you're still very much in the upward trend If you continue to press on higher from here, we could be looking at, you know, charging in three thousand seven hundred and ten twenty So one and so forth, you know that the more that the the higher we move into The more record highs you print the more likely we are going to continue to see record highs Now if you manage to drift a bit lower from here We could look at finding support from the kind of the lows of late last week in around 3656 and if you have a fairly sizable pullback the kind of 3600 area itself might act as support That was the major indices cover take a look now what's going on on Euro dollar I was talking about how the European Central Bank have a meeting this week and it's likely that that's going to increase their Assignments package If you take a look at the price action, we can see that Euro dollar has been in a solid upward trend the last few months There was a bit of sideways trading between August and early November and yet again They can upward trend kicked in largely to do with the weakness in the dollar But nonetheless and the highs that we saw in the dollar in Euro dollar last week We're basically the highs that was highest that we saw since April, I believe or April or May two thousand and Eight it was that the highest that we saw was basically April two thousand and eighteen So we're talking, you know well over two, you know two and a half year highs It's in a solid upward trend if it continues to press on higher from here We could be looking at heading up towards the kind of 123 zone There they're about Because we're currently in at one spot twenty one fourteen or so one spot twenty one eleven If you continue to press on higher from here keep an eye for one spot twenty three So really fairly solid upward trend any moves to the downside could find support from the kind of one twenty area Or maybe just below that in here at one spot 1923 I think if you go have a decent move below that down towards the kind of 180 in area could act as support too Take a look now. What's going about pounds sterling? Sorry pound dollar rather. I'll say that so it wasn't that long ago. You know only on Friday We saw the pound. Well, she briefly Take out the highs of last December and the highs of last December in around one spot thirty five fifteen That was in the back of the announcement that The Conservative Party had won the size of the majority at the UK general election in December 2019 So very briefly said above that so it's in a clear, you know upward trend Granted brexit and certainty is back in back in the radar Well, the UK has left the European Union But uncertainty in relation to the future relationship between the UK and the European Union is back in the radar Hence why we have a fairly sizable sell-off But keep mind we draw a trend line between the lows of late September and the lows of early November We don't get this trend line along here. We're so comfortably above that that trend line Like I said, we've hit the highest level in over a year Not too long ago. The highs that we saw very recently were basically the highs that were last seen In you know May 2018 so we're talking, you know over kind of over two and a half year highs So the trend is not very much the upside if you continue to press on the higher from here We could be looking at retesting 134 retaking 134 could put the kind of the recent highs and the radar in around one spot 35 39 And if you go beyond that we then have to go ahead, you know We could they be looking at heading up towards, you know on the kind of 136 area, you know, which hasn't that was last seen in May early May 2018 To the downside even even if you kind of have a fairly sizable Move lower, you know, we could be heading back down towards the mid November lows in around one which is in around one spot One spot 3106 and if you go below that you could be looking heading back down towards the kind of the 130 area Coming on now lasted two commodities starting off with gold So basically gold Has had a fairly negative on about the last few weeks and months So you can see it's been a fairly downward downward trend the last few weeks Basically since about earlier for the last month. So it's been in a fairly clear downward trend That ties in with the kind of broad negative move We've seen between the all-time highs in August and then it kind of traded sideways into late October Aggressive move lower recently and in fact the lowest that we saw last only only a week ago With the lowest level seen since early July now the market managed to kind of push on higher rebound Recoup some of the losses that incurred but notice how this area here in around 1848 1850 which actually nicely support on a few occasions has appeared to have been acting as resistance now So we rebounded pull off Moving off of the recent lows, but the same time we failed to kind of take out an area of previous support Which is potentially no acting at new resistance If we can't retake that level because it we could see the market turning over on itself yet again heading back down towards 1800 or 1803 is the turn to move the average 1800 it's kind of a big kind of you know number to keep an eye out keep an eye out for on the downside And if you go below 1800 we could be like you're retaking the recent lows in around 1764 and if you take out that you'd be like you're printing at new multi mod lows and I could take us back down towards 1747 I moved to the upside if you take out 8 1850 we could read retest blue line here the fifth that he moved the average in at 1879 and if you go beyond that you could be looking any backup towards 1900 or just north of it in at 1911 this year line here at the 100 a moving average and Lastly, I'll take a look at what's going on on the oil market. I'll take a look at the crude oil The crude oil Brent cash contract So the oil market only on Friday just gone Had fresh nine month high basically that was on the kind of the announcement that OPEC plus Are going to introduce production cuts or but they're going to roll back on production cuts But those the rollback won't be anywhere near as steep as originally planned, which was an entire surprise If you're going to watch in the news for the last week or so, but nonetheless, they're keeping Output relatively constrained Traders were looking further down the line ago. There's a vaccine vaccines are in the pipeline You know the the world economy could look very different three six months down the line and therefore Demand for the likes of oil in theory should be higher So those combination of the of those two factors has set all really move higher at the last few weeks So it's been pushing higher recently We're currently in around $48 and 66 cents if you continue to press on higher from here We could be looking at targeting 50 bucks at the next big psychological number and if you go beyond that We could be looking at retesting that the highs of early March in around 54 spot 28 And this is when always beginning. It's fairly brutal descent It fell down to you know in a pretty aggressive sell-off late February March We had a rebound up to back up towards the 54 spot 28 before then having another aggressive move to the downside So keep an eye for that level if you do manage to drift a bit lower from here Support could could be coming to play from the zone here in around 46 spot 81 a move below that could see its head back down towards $45 a barrel, you know that area acts as a bit of a It's kind of a consolidation zone in the last few months I leave it even if you go below that we could like heading back towards to the one of the movie average this yellow line here Support in the middle in mid-November and that comes to play in at $43 and 14 cents That's all from this video. Thank you for listening. Have a good trading week and good luck