 Hello, welcome to this CMT markets trading update with myself Jasper Lawler Now I'm recording this video on Thursday. You'll probably be viewing around Sunday on Monday So I'm going to miss a day or so is worth a price action But specifically recording it today because we've just had the the ECB meeting We've not seen any extra action from the ECB So both the Bank of England and the European Central Bank not doing anything on monetary policy And this week ahead that we're looking at we've obviously got to the meetings from both the Federal Reserve and the Bank of Japan and Really, I think a couple of factors driving the record highs that we're seeing in the Dow Jones industrial average at the moment the US 30 as we trade it and as I've got on the screen here is That earnings are coming in ahead of expectations in the US But also there's an expectation that central banks are going to ease policy further Or maybe in the case of the Fed just keep loose policy going for for longer And so central to that will be what these these banks update us with it this week Before we get to dig into the details I don't want to do just a bit could have a quick bit of technical analysis on the US 30 and and then the dollar yen the US 30 chart As I'm sure we're all familiar we're basically seen a break out into record territory here And so I've just drawn a zone Highlighting the record high which we're now above and also just that pre-Brexit high, which we obviously clearly above as well At some point there's got to be a pullback here with According to the cash markets had nine straight days of gains on the Dow Jones industrial average So obviously some sort of pullback in order This zone would be support area number one for me if there is some sort of pullback I would be expecting a bounce Now the reason I suspect that this trend still has some more room to go is if you look at this RSI We haven't gone into the the overboard territory yet. Now, which we're into a trend. We're breaking out to new highs But the RSI is still below the 70 mark that's considered overboard I mean if you just reference this previous rally from the lows It took three downward peaks of bearish divergence before the trend eventually rolled over into a trading range Now we've broken out of that trading range and we're pushing into new highs now And it seems like pullbacks could be narrow But fundamentally behind that again, we've got these central banks to look forward to I Think specifically maybe more of you importantly there than the Fed Just specifically this month is that we've got the Bank of Japan the re-election of Prime Minister Abe has re-reamped up calls for Monetary stimulus fiscal stimulus we know is in line There's this talk of a 20 a 20 trillion yen stimulus package of Basically infrastructure spending and so the thought is that alongside that the Bank of Japan are perhaps going to expand their quantitative easing program Cutting interest rates further into negative territory. I don't think would be seen too well in markets but somehow purchasing some sort of extra assets or Increasing the total number of purchases that they target in each given year I think would be seen well by markets and would be a reason to believe that the yen is going to fall in value and Could see a jump in dolly in now on this dolly in chart We've got something akin to a double bottom at the 100 level So we're we're well positioned here to put in a pretty significant low at this round number We've run into a series of resistances one from this declining trend line Which is seeing a bit of a pullback for today, but also the 107 level this previous peak Again from pre-Brexit on the 23rd of June and the 50-day moving average So a few areas to suggest that there could be a pullback from here and we'd drift back into to range trading conditions The fundamental driver there would be for a week a dollar We'd have to see that the Bank of Japan We could dollar obviously means a stronger yen We'd have to see the Bank of Japan fail to deliver anything. So if the Bank of Japan fails to deliver Dolly in dropping back into its trading range Perhaps eventually taking out that 100 mark But if it does come up with some new measures Increasing quantitative easing specifically we could see a breakout into a new uptrend in dolly in and I think that would Also support the rise in the US 30 because not only will we have that earnings which at the moment a beating expectations We'll have central banks back stopping that that rise as well The Fed could a bit of spanner in those works, but I think still It seems unlikely that a fairly cautious Fed in general is going to make any kind of heavy hints That any kind of rate hike is going to come Before the September meeting some suspicion that it could actually happen in July I think not I think September is probably unlikely to But obviously that's something to watch out for the data in the US has been improving a bit We just need to see the Fed's language change to match that data So that's about it. We've obviously it's a big week of earnings again, but also central banks very much in focus We'll be looking out to see if this US 30 can sustain its breakout into record territory and where the Dolly Yen can Again drop and take out 100 or if that 100 level does in fact hold Thanks very much. Good luck with trading this week. It's Jasper signing out