 Hello and welcome to the Monday market update with me David Madden today's date is Monday the 22nd of October at the time It's just got 1202 British summer time This Monday morning actual markets in Europe are in positive territory We had a very big rally in Asia overnight and the Chinese stock markets closed up over 4% The Beijing authorities have bought in some temporary changes to the tax laws and that actually can really spurred on the buying The buying overnight We're only a small bit of that positive sentiment in Asia overnight and I should spill over into Europe With Italy remains in focus The Italian government are still keen to press ahead. I should increase the budget deficit This is as not to calm down too well in Brussels. Moody's have come out. I'm actually downgraded it at least Deprating to one notch above junk status. So this is actually a bit concerning but The good news is actually in same update Moody's also Update upgraded their outlook to stable from negative. So Investors aren't actually too worried about about the the downgrade because of the because of the upgrade to the actual out the the forward guidance the the outlook So there's an overly aren't overly concerned about the prospect of future downgrade in the near term So it's a bit of a overall It's a bit positive for the Italian story, but Italy is a it's not out of the woods yet So we're seeing a bit of a positive start here in Europe It's it's a fairly quiet day in terms of both corporate stories and also economic indicators So we've heard it's likely to see fairly light volatility in terms of the currency market as well Taking a look ahead at the week ahead The weekend article can be found on our website if you go to cmcmarkets.com and under news and analysis You'll find the week ahead article. So looking ahead to tomorrow. We have first-time figures from Whitbread on Wednesday We have the Bank of Canada interest rate cessation and as widely expected, but we're gonna see a rate hike from the Bank of Canada On Wednesday, we have the the plash PMI reports from both France and Germany for October on Wednesday We have first quarter results on Microsoft and we also have third quarter and on Thursday We have third quarter results from Twitter Thursday, we also have the ECB meeting now. Obviously, this is the situation Europe at the moment The European Centre Bank are keen to wind down their the bond buying scheme, but then at the end of this year at the same time the Broke dust was gonna stand off on Italy It's probably going to be big issue in relation to in relation to the kind of the European story and your own story in the near term Friday we have third quarter GDP figures from the US and also Friday We have third quarter figures from role by the Scotland To take a look now at some of the major markets. Let's see what they've been up to Equity markets broadly speaking Volatility has dropped off compared with say two weeks ago We're at the major sell-off but and we had seen some markets have seen a bit of recovery in the last number of training sessions But we're still well off the highs that we're in at the beginning of the month or the levels that we saw in September So taking a look here at the at the footsie 100 as you're saying here We endured a major sell-off in kind of the early part of October at the bulk of last week We just saw the markets kind of Drop really drop off in terms of volatility and actually trading ranges But then again, we're still there's still a small bit of fear there as at the same time markets really haven't recovered Haven't I've only recovered some of the ground that they've lost so We're still very much in this downward trend In the near term we're seeing as the market hasn't pushing higher I've seen a steady decline in negative momentum So the decline of negative momentum is confirming the upward move that we're seeing in the market But we're still very much Below the currently moving average this red line here, which comes to play at seven thousand four hundred and fifty eight And while we remain in south of it It's likely at the outlook is going through is going to continue to remain negative If they happen to kind of push to the upside On the on the footsie 100 we could to retest this region here in around the seven thousand two and fifty area Now that now as long as a seven thousand two hundred twenty seven thousand two hundred fifty in this area here could be an area A bit of resistance if you do see a squeeze higher And if the market actually does manage to actually kind of push lower again and Drive back below seven thousand back below the recent lows of a six six thousand nine hundred twenty three I could be looking heading back down toward this here. We're here at six thousand eight hundred and thirty nine Take a look now. What's going on over in Germany with the tax similar situation here or by the tax The volatility has a Dropped off, but we're still very much in the downward trend If you draw a trend line between the highs of June and the highs of July and also to the highs of September You would see a fairly classic example of low of lower highs. We've also seen probably speaking lower lows as well Granted we have we are off the lows of last week that really still isn't just doesn't really do much too much for us We're still very much below that trend line. We're so well below the 20 moving average So we could see continuation of the negative trend. I continue for the tax And if you look to continue to look to continue in our trend and take out Yeah, the reason that recent lows of just above eleven thousand four hundred We could they be taking us back down towards the kind of lows of the level say eleven thousand Granted that might be some way away, but it would be the next bit of big psychology number to keep an eye out Keep an eye out for if you manage to push higher here I would be able to take out that the last week's high of Sent to say in around eleven thousand six hundred fifty area in this area here This big year to keep an eye for would be twelve thousand It's a big psychological number and people know that twelve thousand they keep an eye for this area here This straight line resistance, which would come into play in around the twelve thousand one hundred and eighty a region Take a look now. What's going over in the US? I should take a quick a look at the Italian market first of all singing at least seems to be in focus This to give you an indication about negative things are the Italian market only on Friday So felt to a level That wasn't seen Since February 2017 to give you an indication just how bearish things are over it over in Italy It's been a classic example of a downward trend in recent months It's said it's a steady series of lower lows and lower highs granted. We are a bit higher today, but we're still no one near No, no one here kind of recovery mode while we were in south of the series here 20,000 big psychological number is that it's likely that we could see further pain and pressure on the Italian market And if you do drop back below 19,000 and also the recent back below the recent lows of eighty thousand seven hundred and fifty-five Thank you for looking back at now towards this area here 11 not seen since February 2017 back down towards the eighty thousand six hundred and fifteen region Taking your attention out over to the US. What's going over on the Dow Jones? so the Dow Jones as I said it as as Magic of give back give back some of the some of the Some of the grounds that made last week So yeah, we obviously had the sell-off I was with a steady increase in negative momentum the marketing pushing higher broadly speaking for the last Week or so, but we also seen a fairly steady decline in negative momentum So things are looking a bit on the on the more positive side over on on the Dow Jones This red line here the turning moving average which comes to play at twenty five thousand one hundred and sixty three Why would we remain above that region? It's possible that we could see further further buying Further further upper moves on the doubt on the Dow Jones It's also worth noting that you know, we're not too far away even if you do dip below it We could find support coming to play at twenty five thousand speaks like a launching number and then also keep in mind The recent low wasn't too far away from there either. It was twenty four thousand eight hundred and ninety seven So this entire area the kind of zone say between the turning moving average Three five thousand one hundred and sixty three twenty five thousand to be kind of psychological level and also the recent the recent October low of twenty four thousand eight hundred and ninety seven So that's that that region there would potentially be a bit bigger of support And if you do take out the the recent October low At twenty four thousand eight or like a seven that would be quite quite worrying Or we could see further losses And if you do see if you do continue to push on lower from there If you really can head back down towards this area here if you draw a trend line between the lowest of giant of February of April and also of May we can see that the trend line coming to play here And if you do take out the recent October low if you really head back down towards the trend line Which takes back down to some of the region of twenty four thousand three hundred and fifty If you do manage to kind of push on higher from here These levels on the Dow Jones keep them after this blue line here The fifty moving average which comes into play just above twenty six thousand and notice how it did act Managed to act to support all our complications recently out of that support in the past It makes it more like it that metric could act could be important in the future as well Take a look now at the NASDAQ 100 similar looking shape to the chair of the NASDAQ 100 Where by the market itself We had the major sell-off we've had some better balance back with the market has been drifting lower again Similar to the Dow Jones. We were in a general area of potentially important support here. It's support prices So keep an eye on the Dow Jones on the NASDAQ 100 here This red line here is the turning moving average which comes into play at seven thousand Seven thousand seventy-two we are holding above that area for the time being about see seven thousand Seventy-two isn't too far away from seven thousand big psychological number and then below that again is the What is the the October low of seven thousand thirty six thousand eight hundred and ninety so this entire region here could act Potentially give the areas of support for the doubt for the NASDAQ 100 If you do look if you do hold above this region here We should see the NASDAQ 100 move higher and if you do move move higher on the NASDAQ 100 We keep a leg hanging back up towards this yellow line here at the fifty one hundred moving average Which comes into play at seven thousand three hundred and fifty fifty four And if you go beyond that we could be taking back up towards seven thousand five hundred But if you do break below this area here The October low at six thousand eight hundred ninety we could be looking heading back down towards the maillot six thousand eight hundred and twenty three Take a look now what's going on over in the commodities space So gold after a fairly uninteresting number of months is actually managed to actually break higher I was so decent of move here and got on the gold market in in early October And ever since then it's been once again back in a fairly a fairly a fairly narrow a fairly narrow trading range But nonetheless, you actually have some sort of break to the upside Well, we could be looking at in gold here is where we are spending a lot of time in around the 100 Moving average which comes into play at 12,000 And one thousand and twenty four So if you can manage to remain north of that that metric there We could be looking at retesting this area here in around 1236 if you go beyond 1236 We could be like heading up to 1266 if you do see a fairly decent move to the downside And in the case and the move to the downside may find some support in this area here This this blue line here with the 50 moving average was also coincide which is 1200 Which is also coincide with it by the big psychological number And if you go if you go below said 12,000 if you would like to head back down towards this area here of around in around 1183 Take a look now what's going on over on Brent crude oil start off looking actually at a weekly chart So the big trend has been very much to the upside for Brent crude oil But if you take a look here if you look at the On a weekly chart the week starting Saturday the 6th of October We can see here a fast example of a bearish engulfing here. So that's quite Quite a negative negative sign. So we could be looking for a better reversal And the price of Brent crude oil so the market moved lower last week And actually we're every so slightly kind of in the red at the beginning of this week as well So given that we've also had some very decent fairly large supply numbers In terms of in the trade in the US recently, but also Given that So that that's out to the setting of pressure and all but also keep in mind Without a political certainty surrounding Saudi Arabia at the moment So it's it's unlikely that we see the price of oil just completely Sell off, but at the same time we could see it's just kind of further downward pressure in the near term So take a look now at a daily chart If you if you do look if the recent kind of negative move continues We could be looking any back down towards this blue line here of the 50 moving average Which comes into play at six sorry 78 spot 80 And if you go below that we could be looking any back down towards this this yellow line here 100 a moving average which comes to play at 76 spot 84 How do you move to the upside we could be heading up towards 80 to 50 And if you go beyond that we could be heading up towards the 85 dollars of our mark similar situation in wti So taking a look at wti here It's been selling off recently in the last a couple of weeks fair bit of downward pressure And actually it's fair to say they moved to the downside and wti has been more more aggressive than that of uh of Brent If you look to continue to in the most recent downward trend We could be looking any back down towards the eternity moving average which comes into play just above 60 Sorry, which comes into play at 67 spot 60 Notice how the eternity moving average did manage to actually support back here So if it was a significant level at it makes it more likely that will be a significant significant level in the future If you do look to actually bounce back at all in the price of wti Keep an eye for these these moving averages here the 50 moving average and the 1st moving average And the 50 moving average comes into play at 70 spot 49 And the 1st moving average comes into play at just below that at 69 spot 89 And if you do have a size will move to the upside in wti We could be looking heading back towards the 72 50 region Taking a look now at euro dollar So it's in some some uh some recent weakness again, uh in the euro The wider downward trend that the euro's been in for another month could be looking Could be like is if we're going to fall back into that wider downward trend Volatility and and and the trend rate has been fairly low recently, but nonetheless it has been actually kind of Sadly going to grinding lower since late september Our back below the 50 moving average, uh, which comes into play, uh in around in around the One spot 15 85 mark. And while we were in south of that It's likely that we could see further pressure on the euro versus the u.s. Dollar What's also going to interesting is that we're currently at the kind of 115 area and 115 ticket 115 10 has been a fairly decent level A fairly significant level in recent months and we're trading pretty much on that area at the moment But if we were to move firmly below that again, that would actually suggest that we are heading lower And if you go south of that We could be like heading back down towards the kind of 113 area And if you do mention that you could have properly retake the 110 sorry 115 115 10 region if you have a size will move above that We could be looking at heading back towards the 117 50 area I find the pound versus the u.s. Dollar So starting after a fairly decent sell off between april and august has shown reasonable signs of actually looking down at some somewhat a bit of a recovery So you can see example of a higher highs and higher lows although Although it's fair to say well, it's just plain true that the high of october failed to take off the high of of september but more most importantly We are well above the early october lows So why we remain above this line here the 50 moving average blue line here Which comes into play just above the kind of cycle actually important 130 mark Why would we remain above that? It's like it's at the at the get a wider upward Well, that's it the upward trend for that I say five or six weeks and the pound versus the versus the u.s. Dollar is going to remain intact And if you do continue to push on higher from here We could be looking at retesting the october high of in around the kind of one spot 3250 area And if you go beyond that we could be looking at it heading up towards One spot 30 one spot 34 72 And he moves to the downside in pound dollar if you take off the the the lows of october We could be looking any back down towards these areas here at one spot 28 28 95 And you go below that you could be looking any back down towards one spot 27 85 Just also we're pointing out on our trading platform Readily updated is our chart form section and also our market insights section Some of the updates that we do get posted to it to insights Some of it gets posted to the news analysis section which I showed you Where the week ahead article is and every single day the chart form is uh, it's updated So a number of a different number of different charts will be posted and we buy some commentary in which way we think the price Fights in commentary on the price action If you have any comments on this video or any of the other videos we make you at cms markets Please feel free to leave review on bigger piece and that's all for me this week. Thank you very much