Morning Briefing - 24th August 2018

Hi guys, good morning. Uh, Amplify morning briefing, Friday 24th of August, just gone half 8 here in London. We'll start by having a quick look over the markets from yesterday, what's happened overnight and what could happen throughout the day into the weekend as well. Let's have a quick look over euro or the dollar in general to get things going in what has been relatively you know, lower volumes, trickier circumstances. The euro actually today has been— or yesterday, I should say— it was, was pretty good. And a couple of good opportunities technically. The market reacted quite well on, on this lower volume as well. And no real sort of driver in early morning trade, especially for the euro dollar. You had this, this sort of bull flag, uh, the break of that, a really nice push above, uh, here you can see on the first rectangle, push to up towards the, the pivot, which should have been obviously a, an obvious area of resistance at the time. Nice double top for price to come back down. We had a breakthrough, and, and it was, uh, on this sort of first sort of test of, uh, the break here. I've just drawn a quick arrow. You also had the, the dollar elsewhere weakening. Uh, we'll come on to the pound, uh, the, uh, the gold chart as well at that period. Dollar weakened, pushed higher, and was some good opportunities for those that were still long at the time to get the targets that they were after, really. It wasn't until the back end of the day that the dollar came back to strengthen. We, in the dollar index itself at the time, we had actually weakened, you know, a lot closer to the 95 handle, which has obviously been in talk over the last sort of few weeks and even months. But then we did recover. You can see a sort of break of those lows, that trend line that had held so well in the morning breakthrough, and, uh, and we had then broke lower. And to be honest, we're literally trading now almost on the break of that trend line anyway. But technically it was good yesterday. I know some people took advantage of that, so well done. Definitely some good opportunities. We have a look at the pound as well. You can see similar sort of time period of when we started to push higher. The dollar was weakening. Not really any Brexit-related comments moving the market too much yesterday. It's more just that the dollar sort of drive in price here and on sort of a few technical breaks and push higher. And with the, the pivot acting as a bit of resistance in euros, similar story, uh, for the pound, which was also some support from previous day, uh, on Wednesday as well. And then into the back end of session, dollar started to strengthen, uh, and we can see we broke through that low, similar sort of time to, uh, when euro did it as well. Australian dollar. So we'll come on to this in a bit more detail today. Obviously another change at the top in terms of the PM overnight. However, you can see the initial push through just above my camera here. There's, uh, due to the sort of all the uncertainty that was going on, and you had a continuation, um, into sort of the, the afternoon here in, in the UK, or when those lows broke and we continue to push down a bit more. Also good area of resistance yesterday where I know a couple of people did get in to target what the low was at that time. Uh, regarding the, uh, the dollar yen, um, the morning we had a bit of— yes, dollar weakness. We came back down towards the, the pivot area, but it wasn't really until, uh, the, the dollar strength came in sort of 3 o'clock onwards that we, we pushed higher. And you can see what had been tested once twice, three times. Uh, we did then push on, and this area I've got marked up was, was a previous high, uh, from last week, I believe. You can see we got hit there on the, the 16th high very quickly. So markets correlations working quite well yesterday. Dollar strength to weakness. We've still got that sort of uncertainty around this, this 95 handle. Again, I'll be looking for where get that weekly close, uh, for perhaps a bit of further clarification here on are we going to get a continuation of maybe the recent couple of day trend of this weaker dollar following Trump's comments, or actually is it just a momentary blip for then the dollar to strengthen and we get further pushes to the downside for a couple of these pairs. Uh, oil, really, really nice trade, uh, yesterday, and in fact recent couple of days it has been good. I must, uh, I must say that usually a relatively difficult product for, for many people, uh, but yesterday was, was super. You had the, the pivot, you had a lot of price action around 67.34, the previous sort of high before DOE. A lot was going on there. Price came back down, and, um, I know a couple people got in pivot, and a couple people got in on that high, faded in around there to target, well, the eventual sort of high of uh, the sort of the session around 68s are coming out before. It's a really nice trade. We've continued to push on this morning, as you can see, up to almost 68.5, pushing through the high that we made, um, on the 22nd, so Wednesday evening. A nice opportunity to sort of get in if you're at the screen at quarter past 4 in the morning. And then you can see it has, has continued to push on. Fail test of the high now, so I'll be focusing on that. Um, but yeah, decent opportunities all around really. Nice technical, uh, charts. These are kind of the, the markets that I prefer anyway. Um, we'll come on to what could possibly drive the markets from a more fundamental perspective. Um, but yeah, decent, decent opportunities in, uh, in the States following the cash open. We, we pushed higher, um, made a new high for the uh, well, last couple of days broke through Wednesday's high. Price then came back down after cash open, not just in the S&P. Dow Jones and NASDAQ did follow through. We've had sort of— well, the trade talks are obviously ongoing but sort of stalled really between US and China overnight, so that's sort of weighing on them. But you know, anyone that knows my view on the trade talks, it's always just a momentary blip before we continue, uh, against the trend that followed from the trade talks. So I do believe we'll have another sort of push to the upside in the short term for equities. And I think it's also worth clearing up that we have not made the all-time high. I've seen on Twitter last couple of days even Bloomberg suggesting we had, but not on the spot market, not on the futures. Here you can see we still got a bit of, bit of room to go, probably about half a percent. Can we get there today? Remains to be seen. If we get a close above there, you know, it'd be just another sort of further sort of push to the, to the upside sentiment-wise. Um, definitely want to keep an eye on, uh, today, uh, just sort of, uh, hanging around that pivot level, uh, as we speak. NASDAQ, similar cash open push higher, a bit of profit taking, bit of negative sentiment, trade talks, whatever you want to call it. We came back lower to find support, pivot, lower the day, and we have sort of drifted higher, uh, in the early trades so far. Gold, which, you know, has had a bit of a— if I just make this a shorter time, um, a longer time frame, you know, we've had a bit of a rally, if you like, coming back from the, the 16th. What would that be? 16th would be last Thursday. And we've, uh, just sort of, you know, slowed down that brief rally for the last couple of days. And there's a couple of good opportunities here when the, the dollar had been, uh, sort of strengthening into the afternoon. We came back down and broke the, the low, the the high of the session, and the S1s worked quite well technically. Probably got a bit of a trendline break there going into the afternoon as well. So decent trade opportunities yesterday. I'll be obviously a bit cautious today. You've got the everything going on with Jackson Hole, you've got bank holiday on Monday in the UK, so volume towards the sort of the middle back end of the European session might start to sort of die down a bit. So profit expectations, I would be sort of reeling them in, perhaps not expecting too much from those. But technically yesterday markets acted quite well, and I would say that this week as well in general. Um, there's been some half good opportunities in the currency pairs looking to sort of, you know, play it technically from support resistance, buy low, sell high. Um, how the markets are trading now, just how they've opened the DAX— let's bring this into picture— up and down, it's gone back to its usual sort of craziness, right? Between the pivot, between the R1 contained for now. We are starting to get squeezed in. The ranges, uh, for the day is certainly getting smaller. Taking us back here, so Monday would be the 20th, right? So yeah, you can see nice push from the open. Tuesday, nice push. Thursday and so on. We're really starting to get squeezed in. It does get that feeling, perhaps not today, but one to keep an eye on, on, uh, the sort of the top end and low end of these ranges where prices are starting to get squeezed in. We could see a big push either way. Which direction do I prefer? I'd say, to be honest, to the upside. Maybe it's that we get that, uh, let's just get that arrow out again. Nice little push through here targeting the, the sort of the high of the week where you'd imagine a few stops are, where people, you know, got trapped going long above R1 as well. And obviously I'm pointing with my hand, but the, the high that we had also around the 14th. Anyway, just an idea to bear in mind. Will the volume be there today? Friday, notoriously quite a slow day for the DAX, so remains to be seen, but one to keep an eye on. Uh, anyway, overnight, let's get a couple of stories in the mix here. You've got the new Australian PM, uh, Scott Morrison. Um, Malcolm Turnbull ousted as PM, uh, overnight. So this is their 6th in 10 years. Um, quick question answers in the chat. Fingers on the buzzer. Which other country has had more than 6 in the last 10 years? Uh, write those answers in the chat and I'll come back to that, uh, in a moment. Um, couple interesting points if we bring up the Australian dollar on, uh, on this sort of story as it developed. We have seen a bit of recovery. So we mentioned Overnight you did have— or overnight yesterday, I should say— you had the Australian dollar weakening. Price pushed down, broke the lows, and really on that sort of announcement of the new PM, we have pushed higher. And I would actually now probably favor an upside break. Not saying that I think it's definitely going to happen, but that would be the trade idea that I'd be looking for: a push of those highs targeting the resistance from yesterday as a nice sort of trade to, to the upside there for the Aussie dollar. That would be my, uh, my focus for, for now. Takes me back to, uh, when you had the whole situation about is David Cameron going to resign, the political uncertainty there where the pound weakened. Theresa May comes in, you had a brief rally there for, for the pound as well. So it takes, uh, takes that sort of initial uncertainty for the down move, understandably, and then you get that sort of more clarity coming currency strengthens, and you've seen that a few times here. So would favor the upside for now. Uh, worth noting, uh, with, you know, the Australian situation, yes, 6 times in 10 does sound bad. Um, you know, the last 5 prime ministers— got a couple of stats for you here— have served just 11 years or less than 11 years between them. However, the 5 before that lasted 35, so average of 7. So now, nowadays, it is definitely, uh, a case in Australia, where the sort of the leadership of the PM is, is, is nowhere near as long as, say, the Western sort of world. They go to the polls at least every 3 years. Over here, we know it's— well, in the UK, it's not at least until 2021. Whether they wait that long remains to be seen. But just something to bear in mind, is this a massive story? Is this a massive shock in terms of the change in leadership in Canberra? I think it's almost going to be pushed to one side. And I think for the Australian dollar, we're going to now focus more again on China, on the trade talks, which has really sort of dampened the, uh, Australian dollar really since the beginning of the year. You can see here, this is a daily chart. Let's remove the pivots to clean it up for you. And you can see it's— I mean, look, you have, yeah, a couple of peaks and troughs, but we are coming, uh, lower still worth keeping an eye, um, on. We didn't quite get there. Would have been a nice level around that 74. I know I put it on, uh, um, on Twitter not too long ago, but didn't quite make it up. But definitely one to bear in mind, that trend line coming from those 2018 highs. Obviously in the mix there you've got the dollar strengthening, but I feel PM situation pushed to a side now. We focus on bigger things. Yeah, Italy, Mike. Um, yeah, not a surprise, I guess. But, uh, yeah, always Italy. Uh, mentioned as well, overnight you had the US-China trade talks all, uh, end with little progress. That sort of has weighed on equities again briefly, or that's the reason they're giving for that sort of profit-taking sell-off, if you like. Uh, again, blipping, blipping the stone. I think, you know, we'll continue to, to push higher, whether it be into the end of the week or not. I think does remain to be seen. I believe we will continue to push higher. S&P, just in terms of a trade opportunity, we are actually coming up to the high of the day, which is also the high, uh, we had just before we pushed higher post-cash open. So we've had some decent price action around here, uh, in previous sort of, uh, sessions. So I'll be keeping an eye on that. Maybe it's you would rather see a confirmed breakthrough before taking that trade on. Definitely, uh, one to, to keep an eye on this morning, perhaps more into the afternoon. Just starting to see, uh, silver at the corner. I know a few people do watch that, pushing, pushing higher. Gold kind of trying to follow suit as the dollar is under a tad bit of pressure this morning. We've seen euro push high. I'm just going to switch through these charts relatively quickly. And pound as well, not too far away from its highs. I'll come on to a couple of these charts, uh, later on as we, we have a look more at the calendar, what could drive prices today. Um, let me just zoom in to make this a bit clearer. Data-wise, we've had some, uh, lower-tier German data this morning. We've got durable goods into the afternoon, not expecting too much to happen there, 1:30 UK time. Uh, got the rig count 6, again not expecting that to be a driver for the remainder of what will be the remainder of the week from then. It's all about the speakers, uh, here with Jackson Hole continuing to go on, uh, the big one that everyone's looking, uh, out for. Um, let me just go back. Yeah, I think I just didn't transition there, so let's have a quick look again. Yeah, 1:30, durable goods, Baker Rig Count, uh, Baker Hughes Rig Count, not expecting to do much. Jackson Hole is going to be the driver here. In terms of potential anyway, I should say. Obviously, I think ears on the, the wires and eyes on Twitter otherwise. But we have, uh, yeah, Jackson Hole. Just have a quick look at, in terms of the speakers before him, you have Feds Bullard and Mester speaking first of all to CNBC, uh, 12:30 and 1:30, and then half hour after that speech they then go speak to Bloomberg. So much like those that watch, uh, say the, the football interviews post-game, it will be like they do their Sky Sports, then they'll do their BBC. The first one's the, the main one that gets reported, and also the comments that usually happen in the next interview are very much the same, same sort of questions, same answers. They've already answered it before, they're not going to slip up, you wouldn't imagine. But also, are they really going to say anything before the main man comes on himself? And is the main man Jerome Poulle, is he going to buckle under the recent talk from Donald Trump, I would say very unlikely. But that also makes a good opportunity if in fact he, he was going to, um, if he was just to give any indication, uh, about the sort of the rate hike trajectory or even September, then yeah, you could perhaps see a bit more— well, you would see a lot more sort of dollar weakness following on from those, those Trump comments. But if he stands his ground you may well see a sort of, uh, a hawkish reaction from that. So, you know, potential short-term volatility move, uh, into the afternoon from, from Jackson Hole. It wouldn't surprise me, uh, but I would just bear in mind, uh, into the sort of the close of the day, 4 o'clock, 5 o'clock onwards UK time, I would, I'd imagine the volume really is going to start to sort of die down as people look for their long weekends to enjoy what's left of the sun as, uh, it's seems today could well be, uh, the top, the peak, as the weather starts to go down. People wearing coats in the city today as well. So yeah, quick look over that calendar. Speakers out throughout the day. I'll post in this tweet as well that's got the, the times on for you, uh, as well. But, uh, yeah, early morning I would expect to be similar to last couple in the charts, has been a bit more technical and not really looking to, to be, uh, too rushed in terms of, of, uh, sort of profit targets. Have the patience, uh, on a morning like this with perhaps bigger things to come into the afternoon. Trade opportunities today, or, or levels that I'm half interested in— obviously very, uh, aware that people look at the market different ways— but in terms of this pound pushing higher, technically I like the look of, of yesterday's low and pivot and if we can get a confirmed sort of test around there to continue this sort of move lower. I do believe overall the sentiment is still to the downside regardless of what the dollar is doing. You know, again, I heard on the wires this morning the whole Brexit no deal deal, whatever situation is, you know, it's very unlikely for October, but it wouldn't be a massive issue if November keeps getting pushed back. And that talk, I do believe, remains rather sort of negative overall for the pound. Uh, but I'll be looking to trade it more technically today, and I think yesterday's low pivot area does look, uh, relatively good. Mentioned earlier that the dollar's slightly weakening. We've seen euro push higher. Uh, pivot's not, uh, the worst place in the world to be looking to get a retest of that breakthrough. You've also got an area where you could sort of have your stop behind on that sort of trend. That would be the point where maybe this trade doesn't work, uh, at all. But pivot last couple of days or, or has acted quite well. Yesterday's resistance, day before— let me get rid of this trend line— day before is quite good support as well. So yeah, technically not too bad, the euro recently. So I'll be keeping an eye on this, this pivot now as we sort of come into near enough 9 o'clock. Uh, equities, I talked about the S&P just coming up to that high. We found a bit of resistance around there on that first test. So even more reason to just sort of keep an eye on it. As we've seen, it's already been respected. Those stops sort of build up there. You could get a further push through, maybe more into the afternoon, but something I would be, be focusing on as well there. So summary, overnight equities came under a bit of pressure amid sort of trade talks. That seems to already been recovered, and I'd imagine we will get a test of that all-time high not too far away. To come relatively soon. Oil still elevated, um, actually pushing to a high just now actually, um, in terms of this longer chart. Let me just remove everything on here. Quite an interesting level not too far away from where we're trading, using that sort of breakthrough that we had towards the early part of July. You can you can see we're almost coming up to the sort of top end of that, uh, that trend there. Definitely this week it will be important to see whether we can close above or below that. Um, this is on the daily continuation chart, so what a lot of people will look at from a longer term perspective as well. So I'll be looking on the futures. It looks to sort of come in around your sort of $68, $67s before $69. As well. So definitely keep an eye on that going forward. But I'll put a couple charts in throughout the day, be on the mic as well. Um, any questions, as usual, please, please do get them in the chat. Hope you all have a great weekend, and hopefully tomorrow Arsenal can get back to winning ways and maybe learn something. We should have learned something from the Australian PM in that replacing someone every sort of few years isn't a bad idea, whereas Wenger stayed way too long. Uh, but I hope you all have a great weekend. I'll catch you in the chat and see you all very soon.