Sunday 31st Jul 2011 - 5pm BST Trading Week Ahead Report

Sunday 31st Jul 2011 5pm BST Trading Week Ahead Report
At the time of writing it would appear that The Democrats & The Republicans are closer to a deal to raise the US Debt Ceiling. This past week seen a continuance of an ongoing lack of willingness by both parties to come to an agreement to enable the US Debt Ceiling to be raised, but also, and possibly more important, to add a deficit reduction plan that would keep ratings agencies happy, & enable the US to retain its gold plated AAA credit rating. US GDP figures for quarter 2 were released on Friday in addition to a revision of Q1s GDP number. Sadly for the US both figures were poor with Q2 growth in at 1.3% Vs 1.8% Exp, & Q1 revised downward from 1.9% to a shocking 0.4%. The combination of weak US economic data & debt fears led to serious dollar weakness. In particular, the traditional safe havens of the Franc & Yen seen gains Vs the USD. See the chart below courtesy of DailyFX showing currency performance Vs the USD in the past week.
The dollar's slide against the Swiss franc and yen accelerated after the data showed the U.S. economy grew at a much weaker-than-expected rate in the second quarter. First-quarter growth was also revised sharply lower.
In the coming weak the direction of the USD is going to be dictated by The Debt Ceiling, Ratings Agency moves, & Non-Farm Payroll data on Friday.
GMD Financial Ltd is a Limited company registered in Scotland. Registered number SC288251. Registered address: Level 1, 211 Dumbarton Road, Mansfield Park, Glasgow, G11 6AA. Information or opinions provided by us should not be used for investment advice and do not constitute an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. When making a decision about your investments, you should seek the advice of a professional financial adviser.
Last week was a tense week for Financial Markets. The Dow Jones Industrial Average shed 4.2% with the August 2nd Debt Ceiling Deadline looming ever closer. With Non Farms this week and continued market fears over the debt ceiling volatility is widely expected, with traders continuing to show fears over the debt ceiling. What has been interesting has been the market moves over the past week. Short term Treasury Yields have surged Suggesting a that the market is pricing in a small risk of a US default. So far the main moves have been in the stocks with the S&P 500 seeing the biggest moves so far on the debt ceiling impasse, with traders actually buying US TNotes on a flight to quality. Interesting. Below is a weekly chart of the DJIA. You can see that we have been in a nice upward trend channel (TC) since April 2009. We are testing the bottom of that TC right now. A break of this should be the case should we see any negative outcome to the debt ceiling issue, or be dealt with negative Non Farms data in the coming week. Please see the next page of this report for a Daily, 4 Hour, 1 Hour, & 15 Minute chart of the DJIA for further analysis. See we are right at the bottom of a longer term upward trend channel starting around April 2009. Acting as support for the time being. A break here would clearly be a bearish sign.
Sunday 31st Jul 2011 5pm BST DJIA Charts Continued
Dow Jones Industrial Average ChartsDaily
The daily chart here shows the annual Fibonacci levels of the Dow and a key longer term upward trend line going back to September 2010, currently acting as decent support.
Sunday 31st Jul 2011 5pm BST DJIA Charts Continued
Dow Jones Industrial Average Charts 1 Hour & 15 minute
The 1 Hour Dow chart to the left above has a longer period upward trend channel, and a more recently formed, narrower downward trend channel. The 15 minute chart also showing the downward, shorter period downward trend channel from late last week.
Sunday 31st Jul 2011 5pm BST S&P 500 Analysis
S&P 500 ChartsCash

Again, these charts will be net of key support & resistance levels, with the exception of Fibonacci retracements. The key information to note is the Trend lines & Trend Channels. We will be producing separate Asset specific reports which will provide more detailed technical & fundamental analysis specific to each class.
Daily Chart - 200MA working as strong support in the cash market at the moment with the longer term upward trend line (blue) just below. Notice selling volume has been strong, above the moving average most days of late, with the Commodity Channel Index showing no signs of turning around quite yet. The next move will clearly be dictated by US debt ceiling news flow, and beyond, key economic US data. Please see the following page for a monthly & weekly view.
S&P Cash Charts Continued : Monthly & Weekly
S&P Futures Charts 4 hour Chart
2 Channels in play here, Current downward channel with Trend Lines (TLs) T1 & T2, I have a feeling T3 & T4 will be in play soon should we get good news on a debt ceiling deal and deficit reduction plan from the US , giving the S&P some upside with the youngish upward trend channel coming into play.
S&P Futures September 2011 Contract15 Minute Chart
A shorter time period view on the S&P 500 Futures contract. Downward Trend Channel
Sunday 31st Jul 2011 5pm BST EURUSD
EURUSD SpotCharts & Analysis

The eurusd currency pair moving into this week remain in particularly volatile territory. Friday seen downside in the early European session, only for this to completely reverse in the afternoon session after poor GDP data out of the US, in addition to the continued fears over the US debt ceiling issue. Look at the week ahead, we have the ECB rate decision on Thursday which most analysts predict to be a hold at the current 1.5% level. The US Debt ceiling & Non Farm Payrolls on Friday will also have a major influence on the markets attempts to determine some direction for the pair. Poor US economic data, a negative outcome on the US debt ceiling issue (which would include the ceiling being raised, with a US credit rating downgrade by a ratings agency subsequently), or a surprise ECB rate hike, or a combination of any of these, would be bearish for the USD. Below is a monthly look at the EURUSD Spot, not the fact we are currently sitting nicely within the long term upward trend channel post credit crunch, & bang on the credit crunch extremes Fibonacci 61.8% level. The following pages show the Weekly, Daily, & 4 hour spot charts. Some futures EURUSD charts follow beyond.
EURUSD Spot, Weekly & Daily Spot Charts
EURUSD Spot Charts, 4 Hour & 1 Hour
BUND, DAX, OIL, GOLD, & SILVER Charts The Bund as always will be a key market to watch throughout the coming week, as will Gold, & potentially silver, should their be a flight to quality across the board with risk off. Oil as ever, will play its part in the markets also. We will be releasing reports on each individual asset class early on Monday however for now, here are some charts on each class. Bund Monthly
Bund Weekly
Bund Daily
Bund 4 Hour
Bund 1 Hour
Dax Daily
Oil Monthly Chart
Oil Weekly
Oil Daily
Oil 4 Hours
Oil 1 Hour
Oil 15 Minutes
Gold Weekly
Gold 4 Hour
Silver Weekly
Silver Daily

Sunday 31st Jul 2011 - 5pm BST Trading Week Ahead Report

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Sunday 31st Jul 2011 - 5pm BST Trading Week Ahead Report

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Sunday 31st Jul 2011 5pm BST Trading Week Ahead Report

Sunday 31st Jul 2011 5pm BST DJIA Charts Continued

Dow Jones Industrial Average ChartsDaily

Sunday 31st Jul 2011 5pm BST DJIA Charts Continued

Dow Jones Industrial Average Charts 1 Hour & 15 minute

Sunday 31st Jul 2011 5pm BST S&P 500 Analysis

S&P 500 ChartsCash

S&P Cash Charts Continued : Monthly & Weekly

S&P Futures Charts 4 hour Chart

S&P Futures September 2011 Contract15 Minute Chart

Sunday 31st Jul 2011 5pm BST EURUSD

EURUSD SpotCharts & Analysis

EURUSD Spot, Weekly & Daily Spot Charts

EURUSD Spot Charts, 4 Hour & 1 Hour

Oil Monthly Chart

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