 Hello and welcome to CMC Markets on Friday the 19th of January and this quick look at the week beginning the 22nd of January and it's certainly been a week of milestones the past few days. We've seen US and Brent crude prices hit the highest levels in three years. We've seen the US dollar hit a three year low. We've seen the euro hit a three year high. We've seen the pound hit its highest level against the dollar since the Brexit vote. That's not to mention the fact that we've also seen US markets hit new record highs. We've seen the Japanese Nikkei hit its highest level in 26 years and we're starting to see potentially the German Dax looking at retesting the highs that we saw at the end of last year. The FTSE 100 on the other hand is starting to look a little bit top-heavy. So as we look ahead to the upcoming week, I think the key events that I'll be keeping an eye out for will be the ECB rate meeting which is due out on Thursday. We've also got the latest Bank of Japan rate decision and we've also got the latest unemployment and earnings data or wages data from the UK economy not to mention to 1st quarter GDP numbers first iteration of 1st quarter GDP numbers from the UK and the United States. So let's start off with looking at US markets because we once again made new record highs on the Dow over 26,000 and the S&P above 2800 and a large part of the gains that we've seen thus far this week in terms of US markets have been predicated on a potential faster repatriation of US dollars in the wake of that Apple announcement that they're going to start looking at investing an awful lot more money in the US economy that could potentially bring in a tax windfall for the US government of around about $38 billion and that's what really drove this move higher in the S&P 500. So what does that mean for other US companies going forward? Will that prompt companies like Microsoft and Google to do something similar? Repatriate US dollars potentially either invest in the US economy or pay higher dividends or implement share buyback. So at the moment there doesn't appear to be any evidence for now that the US markets are showing any indication that they're likely to roll over. That being said if we look at say for example the FTSE 100 slightly different story here we haven't been able to really progress beyond the highs that we saw last week around about 7,800. If we look at the daily chart we are looking at potentially rolling over and could slip back as low as 7,600. That's significant because it was the breakout level from the highs that we saw in November. If we look at a daily chart there's potential there for a little bit of a key week reversal but again I think much will depend on what the oil price does relative to and commodity prices in general because they have started to show a little bit of weakness after a significant run up from the middle of the summer. If we look at Brent crude prices we can see that illustrated here. We've seen a little bit of what I would call some signs of exhaustion. We saw a little bit of a shooting style there. It was negated, wasn't confirmed. We've seen a little bit of a bearish reversal there but what we haven't seen is a move below around about $68,70, $68,60 and I would want to see a close below this support line here to really I think build on the momentum or potential momentum for a little bit of a correction towards the downside. US yields are starting to age higher. They're at their highest level since 2014. Ten year yields that is. Two year yields at their highest level since 2000 and I think if we continue to push higher on US yields then I think there is potential that could start to impact on equity market valuations. Certainly if you look at the US 2 year yield relative to the rolling annualized yield on the S&P 500 there's certainly potential there that the attractiveness for owning US stocks relative to the bond market yield could start to diminish. Not showing any evidence of that at the moment and certainly in terms of the dollar we do appear to be starting to show a little bit of consolidation on the dollar index below this 91 level. I talked about this 91 level in the Monday market webinar. There is a video for that up on our YouTube channel youtube.com forward slash CMC markets PLC. That's a key resistance level. If we are going to bottom out around about 90 level then what we really need to see as a confirmation of that move higher through 91 up towards around about 92 but while it's below 91 the dollar is likely to remain a little bit on the soft side. Obviously this dollar index has implications for Euro dollar and as we look forward to the upcoming week the big item on the calendar apart from the World Economic Forum in Davos which to my mind is a complete irrelevance as far as markets are concerned it's really just a talking shop for the great and the good and ultimately while it may make some really decent headlines for an awful lot of the mainstream media as far as the markets concerned I don't really have that much of an interest in it. If we look at Euro dollar here we can see that there's decent support around about 121.65, 70. We are finding a little bit of a top around about 123 but one thing that has been notable over the course of the past few days is some discomfort on the part of the governing council that the Euro could move too high too quickly and in and in so doing impact on the ECB's inflation target inflation in the EU is at 1.4% core prices at 0.9 the last thing they want is for a higher Euro to start pushing down on its ability to hit that inflation target so not expecting any change to policy at the upcoming meeting what we could see is a little bit of jaw-boning with respect to trying to talk the Euro lower. We've already seen it this week with comments from Constantio the vice president of the ECB as well as Seville Novotny the Austrian representative on the ECB governing council so keep an eye on really I think the narrative from Mr. Draghi's press conference are they uncomfortable with a high Euro will he try and jaw-bone it lower. We've also got the Bank of Japan rate meeting and the recent tweet by the Japanese Central Bank to reduce the amount of its monthly bond buying program has prompted I think some speculation these the Bank of Japan could be looking to pull back a little bit from its quantitative easing program certainly that wasn't on the radar three or four weeks ago it is now now this chart is a little bit messy I grant you that but I think there is potential for a little bit of a reversal I will be keeping an eye very closely on this 110 area at 61.8 Fibonacci retracement of the entire up move from 107.30 to 114 if we hold below that hold above that rather than I think there's potential for rebound back to 111.50 and through that but at the moment we're trading 110.15 111.50 looking for a move either side of that to really I think determine where we go to next at the moment no real clear indications with respect to that now one of the biggest outperformers over the course of the past few weeks has been the pound sterling having a good old go at trying to hit that 140 level in last week's video I talked about the potential to hit 140 we've come within 55 points of hitting 140 the big level on that I talked about it last week it's 139.74 that still remains a very very key resistance level it's 38.2 Fibonacci retracement of the entire down move from the 2014 peaks around 171.50 to the lows that we saw at the beginning of last year at 119.50 so this 139.75 140 areas a big big level we could overspill to it but I think in the short term it's going to really struggle to get through there find support around about 137 so also keeping an eye on US fourth quarter GDP first iteration expecting a fairly decent number there of 2.9% Q4 GDP here in the UK expecting again a positive number of 0.4 and even potentially 0.5 I wouldn't I wouldn't expect it to go up to 0.5 but certainly I think a decent number around about 0.4 also will be keeping an eye on the construction sector and the aftermath of the Carillion story a number of subcontractors or smaller companies are reporting next week care group and Vanilla holdings care group is one of the joint venture partners on HS2 and we could get some indication as to what how what sort of amount of money they will be setting aside to basically take up the slack that Carillion has left off. Netflix Q4 results is also I think a key indicator there will they increase their subscriber base in the fourth quarter by the 6.3 million subscribers they guided for in their Q3 earnings update certainly looking to expect revenues to rise to around about 11.68 billion dollars so all the gross story in Netflix continue pace so that's it for this week a little bit of a longer video than normal don't forget to tune into the Monday market webinar at 12.15 with my colleague David Madden otherwise have a good weekend and good luck trading next week