 Okay, a very good morning to everyone Monday the 6th of January happy new year. Hope you had a great break If you are new to the channel, don't forget to like and subscribe for further updates We're gonna be doing it myself and Sam predominantly Every weekday morning our macro kind of market update So me from the fundamentals Sam from the technicals would also have lots of other Interesting pieces live events so covering central bank decisions I did a video about how to use Twitter effectively for trading over the Christmas break So lots more of that sort of stuff to come so do make sure you subscribe to the channel if you're not or haven't already done So but otherwise the big news of course Over the last couple of days has been the market's response to the developments of the killing of one of Iranian or Iran's top military commanders Salamani and that continues to be the main narrative for this morning is open in UK and Europe And as per the headlines this morning as you can see to the side of me some further developments This time in regards to not only Iran and what they've been saying, but also Iraq that was the actual Geographic location of where this commander was killed at that Baghdad airport just a few days ago So looking at the markets this morning As you can see just to recap top right hand corner is my gold futures chart And we're up another twenty two dollars this morning. You'll remember. I did a briefing on Friday Just to update on the significant development that had occurred and we were up at that time about 27 bucks So continuation of the the moves as tensions in the Persian Gulf remain Particularly tense at the moment about the fears of potential retaliation. I was looking at the markets Yesterday on the Sunday, and of course the Middle Eastern markets open on a Sunday And I saw the credit default swap of Saudi Arabia spiked or blew out even more than what it did in this September Iranian reported drone strike on the Aramco network and all of those respected local regions and their stock indices got really hit quite aggressively yesterday So continued kind of that's the main headline kind of macro theme at the moment Continuation of sorts and as you can see here in the center left chart the DAX future just breaking the range since the The opening trade electronic markets at least from the overnight session So equity index futures a little bit of further pressure Nothing kind of spectacular in that respect But obviously wait for the US to come in and see their real full return to markets from the new year because things were otherwise From a volume perspective at least still relatively quiet last week Elsewhere though T-notes have already having popped a little gap up and the reopening of trade have Reversed and closed the gap however equity markets still remain a little bit lower at the moment Crewed obviously still a bit of a standout If I just make that crude chart a little bit bigger for a moment That was the spike around the circle of price moving that we had obviously much more aggressive when the event actually Unfolded that was in the overnight from last Thursday into Friday And then you've had this gap up here. You can see at the reopening of a futures trade on globe X overnight We've managed to put in a high of 64 72 So we were trading around 61 dollars flat At the time before the news broke and now we're trading up just shy of 65 at the high to give you some kind of context to that move So Decent, but by no means you know a huge massive gap in prices if we look at the daily Continuation here it helps to see where we were on that initial 15% move higher that we saw in the September 2019 attack on the Aramco network which saw prices spike up to 63 and a half in the futures So we're now above that and on the upside Probably looking to target next stop at around these highs that we were trading in April It's kind of beginning in the end of the month of April Which is which is basically exactly to the tick of where it's tested this morning It's a lot of people looking at these now Several multi-month high levels anything above there the 66 dollar handle and then the prevailing April high of 2019 comes in at 66 60 quite a few questions I've had over the weekend via Twitter That is a way which you can reach me if you ever needed to I am generally quite active on there And I'll always try and respond to people's questions as the same with these videos on YouTube So do feel free to ask me anything and I'll do my best to respond But a lot of people asking me what's my kind of view in terms of a target for oil questions Like could oil go to $70 and things like that What the answer to that is? Yeah, absolutely. It could go to $70 it go well north of $70 That's not necessarily my base case view, but could it absolutely as we were discussing on Friday If you didn't catch it, you know, just go back on our channel and watch that video because I go through specifically three geographically sensitive areas of the infrastructure for Saudi Arabia that if Targeted at any form of retaliation could definitely see $70 a distant review price point If there was to be taken out much in a similar vein to what we had With the move in September But why has the market continued some of this move on Friday given the fact that you might have thought it's largely Now priced in well, there's been two further developments that have occurred over the weekend Point one sticking with Iran is this one here that the second kind of bullet point on my screen The Iranian government has said there's no more limits to Iranian enrichment remember this is when Trump has come up against a lot of confrontation with other Western allies in regard to the Breaking up of the Obama a broke brokered agreement of the 2015 move About uranium enrichment in Iran And now what's happened is given the developments of Iran have said that look there's no no longer We're gonna buy by any type of threshold We're gonna we're gonna really ramp this up now in response in addition to that the other thing is If you remember the commander who was killed didn't take place in Iran actually happened in Baghdad Apparently a US drone striking. I believe it was near the airport that actually killed him now What's happened here is in Iraq their local parliament has voted to expel US troops from the country And so this is created now new tensions Outside of not just Iran but now also in Iraq And so, you know, this is kind of that contagion effect That can just add a little bit more spice to the mix so to speak so tensions Still simmering and what does that meant for for Trump in response to these latest developments? He's kind of not back down In fact, he's done the kind of opposite He's talked about a lot of these comments here about you know Let this serve as a warning that if Iran strikes any Americans or American assets We have targeted 52 Iranian sites He goes obviously into capitals will be hit very fast and very hard the USA wants no more threats He then went on. I think that was another one. He said as well. That was a pretty similar vein kind of really just suggesting that You know calling the bluff almost I guess if you're on it's like look if you attack us We're gonna, you know, we're gonna bring what's the famous comment. It's 2018 Fire and fury fire and fury will be coming the way of Iran Well, yeah, world's just reminding me after he did say that This was against North Korea at the time not Iran, but they became obviously best buddies But perhaps again, this is the kind of strategy You know, everyone knows that the US military is An almighty one one that is way bigger than any other nation on the planet And you would be very foolish to go against the US military But you know, we know that actual military engagement is probably Something that Trump wouldn't want to embark on now if you think about it for Donald Trump He's got an election to manage Now one of the things he's been trying to do is bring our boys home, you know Try and bring back troops out of the Middle East. In fact, he's now deployed an extra I think it's nearly 3,000 troops into their region. I think in Iraq not only that is that if you go to war that cost money and Yes, there's one thing talking quite aggressive rhetoric in the Middle East which might resonate with your electorate However, that's different when then taxpayers money is financing a war outside of your own Area and you know what what he wants to do is make America great again He wants to invest money internally in order to increase kind of fiscal spending within the economy And so these types of things, you know, these kind of veil threats are exactly that I think I don't think this is something that would lead to that confrontation Now let's not forget as well as that if there were any type of engagement. Well, then where's oil gonna go? It's only gonna go up and that's not what Donald Trump wants either so this is that kind of You know, is it masterful or is it a little bit foolish? But it's an incredibly fine line of which Trump walks between trying to I think get his You know enhance his political kind of status by doing these types of methods but obviously he's playing with a very dangerous game, which is the you know, kind of global geopolitical friendships and alliances as well as Financial markets, of course and for Iran the other thing about Iran is you remember on Friday They were saying you had the Supreme Leader. You had Rahani the president you had Zerif the foreign secretary. They all came out and obviously we're talking very harsh about You know the response of which they would do in the retaliation However, let's not forget Iran's economy is pretty much on its knees Due to the sanctions that have been taking place Their ability to sell oil has been depleted over recent months and so the thought of then going into military Confrontation with the US or its allies would be incredibly Foolish you would think However on the flip side one thing was is that because of the direst state of the Iranian economy actually what that has happened through the death of such a Political figure of relevance there domestically is that you've probably seen the scenes in Iran I think it's the funerals happening today It's quite incredible and what a lot of strategists have been saying is that actually A lot of people had a lot of disdain for the government Given the state of the economy and the impact on people's lives it was having on on the ground in Iran However, this is really brought and solidified the people together again against the US and the West so Yeah net net. I actually think that This will not Blow up to a point of mass escalation where oil prices go 70 80 90 I do not think that's going to happen And I think at the very highest level Donald Trump does not want that to happen prices to be up at those types of levels. So Yeah, my my take for the moment is that yes markets will remain quite quite sensitive and fairly fragile to these Developments if there is any carry-through of these moves I think you're likely to see that over the next coming days, but I reckon within a few weeks No one's going to mention this at all I think the world would have moved on by then So that's my take at the moment Having a look at Gold prices You'll remember we were talking about a very key test of a level of 2019 high that was occurring on on Friday Well, we're above there now and we're looking to close in on the 1600 dollar level which puts us back to levels not seen for what six years So continuing to to push higher in the yellow metal much to the The pleasing of the likes of will deluci of course who we know is a gold bug So long may the gold move continue in that respect I'll let Sam talk over potential targets for that in both the intraday But also the medium and long-term perspective for the gold market Elsewhere other new stories Otherwise you have had overnight The Chinese service sector expanded at its slower pace in December following a strong rebound in the prior month Business confidence falling to the second lowest on record despite a pick up in new orders Let's not forget that beyond this kind of little episode of Iran focus at the moment. I Think the bigger still more impactful long-lasting story is The trade war where is that at the moment? Well, obviously everyone now is on tensor hooks waiting for is this phase one deal We're gonna get signed. Well, the dates now Regarding that is that Chinese trade delegation plans to sign the first phase of its trade deal with the US in Washington on the 15th of January. So what next Wednesday according to people familiar with the matter? The plan is still to send its top negotiator the vice premier to ink the deal. So not actually Xi himself so how I would interpret this is Your date now your expectation is the 15th So that's your kind of marker for when we get the inevitable movement in these these meetings whether via Rumors or delays and so on because these will have an impact as to people's belief and whether or not indeed Forget phase two can phase one actually get wrapped up and and signed and ratified in that respect Having a look quickly at the calendar For today, what have we got coming out? Well, these are all final service PMI data points coming out of the eurozone So not really too much of interest for the moment In the US session as well It's fairly quiet. You do have the market service PMI, but again the final reading. Let me just quickly jump over to My own Twitter account because as you have probably seen if you do follow me on Twitter every Sunday I post a calendar of the week's main events So this is it and a quick overview of what the main events for this week are I've bolded and underlined them Today is relatively quiet. So today is very much a digestion of The Iranian story and these latest developments in Iraq as well Tuesday starts get a bit more interesting. You've got the flash eurozone CPI reading US trade balance factory orders ISM non manufacturing PMI kind of your headline readings Wednesday, what's the latest status then going into the new year for the German economy, which obviously has come under immense pressure kind of building up throughout the period of 2019 over the risks of the protectionist policy in the US the risk of Brexit and so on and so forth So factory orders in Germany Wednesday morning ADP employment change Of course on Wednesday and that then leads us up for non-farm payrolls given the way the dates were for the beginning of the new year payrolls is going to be This Friday coming up and then you've got a couple of Fed speakers Feds Clarita Williams Evans and Bullard are all speaking on Thursday. It's a bit of a cluster there Clarita and Williams the vice chair and head of the Reserve Bank of New York still remain voters Evans and Bullard rotate off now with any voting membership in the FMC So do you make sure as well into a new year you need to update your kind of crib sheet in your mindset as Towards how to react now that those alternate members on the Fed have rotated There'll be new voters in and some of the other voters out net net. It's a fairly neutral change in terms of the Composition of how hawkish and dovish the Fed is going forward. So that's not a great deal of change All right with that, let me hand you over to Sam See what he's got to say from a technical perspective and then I'll see you guys later on in the chat room Thanks very much Yeah, hi guys perfect timing really because the S&P NASDAQ and and Dow all just coming to the break of these trend lines Which had held things up this morning. You can see from the low that we had back on Friday initially We've reversed quite a lot, but you can see here just these trend lines going now So where we're coming to in the S&P anyway look to test the lower part of the day Obviously quite key as well But all of these Markets and the Dow perhaps more so than the others just breaking those trend lines and this could lead to Another leg lower if they were all to break that the lows the day actually see the NASDAQ Not quite breaking through but certainly one to keep an eye on there the euro stocks At the moment just on it's low But you can see the importance of that going back to the levels from the 30th as well And just a bit below there if that was to go you're looking at the double bottom from the 19th and then the afternoon of the 13th and The DAX here just breaking through so you've got imagine the euro stocks will Most likely follow through 13,000 on the futures just below here for the DAX as well so stocks While we did get lower we retraced you can see it's almost fill it It's important right now if we can stay below these trend lines and test loads of the day Could see a further escalation of that oil Understandably higher not massively but higher the gap there from Well here in the open of the futures one to keep an eye on and obviously the close as well should we see any retracement There's really it hasn't done too much for the last hour and a bit But of course keep an eye on that 64 dollars just below and then some very short term resistance But you see one two three times before we finally broke through to 63 94 again Would be a level to keep an eye on if you're only really looking for that continuation Probably worth having on that trend line from the top of Of the day and a break of that and then maybe this resistance point here at 64 25 You could see a further push higher So really I think for these markers is a case of sort of let them tell you what's going on before really looking to To get to involve on the FX base relatively quiet. You can see the euro here ranging Sounds like 2018 and 19 all over again here But in terms of levels to the upside the the high that we had From what was it the 31st? Obviously very important level. We just go back here Daily chart you can see some levels not traded before then since the 21st of October Euro hit that quite nicely and has pushed lower since Above where we're trading and most notably on on Friday's highs the R1 and also just a bit above there is It's a nice previous support which did break down Two trading days ago on the second so keep a watch on that and we're probably getting squeezed in as well You would you would say from the bottom as well A couple of levels to and trend lines to keep an eye on if we were to have a further push down But for the moment the range is small and I'll be more patiently waiting for the euro and the pound as well As focus is of course as elsewhere is on other markets elsewhere And Eurostocks is breaking following the decks there I can see out the corner of my eye the pounders is Been coming down for a while In terms of levels to be aware of today Of course the low from Friday is one to to have marked up and if we were to push higher The the load of the what was the second we found support in the third before breaking through 131 42 on the futures would be Almost this mini range that I'd be keeping a watch on as well You can see we had a bit of a false break of this trend which held from the 23rd I think if we were to get an hourly close below there, then we could see a further run down as well Quick look over at gold which of course popped higher today Up to almost getting to 1600 on the futures, which of course would be the first time in many a year Having a look and just putting this onto a 15-minute chart in terms of how to play this I think it's much like or oil in the way if you just have a look at it Maybe developing some of these trend lines this one here from the Asian session You can see you've got your free tests of a break of that could see a further push higher Almost the opposite of what we've just seen with equities happen at the moment as well Probably getting squeezed in from the low wait for either a break either way I think would be a safe safer play to to go with and of course targeting some of these key resistance points 15 82 To the upside if that was to go quick look over at stocks just to see how they are Behaving you see the S&P now Trying to take out its low of the day the Dow was ahead of the game So you've got to imagine that has broken it which it has and the NASDAQ now on the trend line So a quick look Should be below you can see that is as well So the DAX obviously volume-wise is going to be pushing the most and has taken out Almost or a briefly 13,000 so stocks is on the back foot below the trend lines You've got to be a seller And then oil keep an eye on that trend line as long with along with gold to see if we can get a push higher Quite on the FX space as expected other than really a safe haven pairs But even the yen that spiked higher is kind of back to pretty much flat on the day Hope you all have a good trading session Welcome back. I hope everyone's had a good break and I look forward to catching up with you all at some point this week