 Hello and welcome to the CMC Markets chart of the week video with myself Dave Madden market analyst here at CMC Markets Today's date is Wednesday the 25th of April of 2018 and the time has is coming up to 12 40 BST British summer time This week's chart of the week is the Euro stocks 50 or as we call it here on the CMC Markets training platform The Euro 50 and as it as always we are looking at the cash market Now the Euro stocks 50 like other global indices had a major sell-off In in January of this year as you can see here And I've heard a decent start to 2018 in January both like like many global indices and a fairly sizable sell-off Which started in January and kind of Rannis Rannis course in February, but a friend of mid-February up to the middle of March We did see it training about to be range-bound But for the last month or so from late March up to now the market is fairly steady upward upward trend I should manage to manage to create a multi-month high only yesterday But the fact that we've turned lower yesterday and again today isn't an enormous surprise because if you look at the Mac the Histogram the Mac the indicator you can see while the market was pushing higher here in late in late March and 12 April we can see that there was a steady increase in positive momentum But in the last few days we know let's have the market The actual market itself was pushing higher and creating fresh multi multi-week and multi-month highs Whereas actual Mac the indicator was actually the end slight decline So when you have that when the market is creating higher highs But the Mac the indicator is not creating higher highs or you're seeing lower highs There are versions between the two and in the case that the buyers are running out of steam Let's say that if we're going to immediately enter a downward trend It's just that there is there it very am the momentum are the the bullishness that the buyers have since it's running out of steam So what we could see is we could see the market drift a bit lower Before potentially moving higher here from here seeing as we have been in an upward trend for a month It's a possibility we could see the market drift a bit lower from here for potentially continuing the wider upward trend That has been in for the past four weeks You notice these dotted lines that I have on the screen here, and this is the Fibonacci retracement Levels now for those of you don't know about Fibonacci retracement I essentially a theory would state that after a significant market move the market will recoup or retrace a Certain percentages of the previous move now the Fibonacci retracement theory has a certain particular particular Trace with levels in mind such as twenty three point six thirty eight point two fifty percent and sixty one point eight percent So all these dotted lines here are those Trace with levels and of course if it was a fully retraced move it would be a 100 percent retracement Now when you apply the Fibonacci Resistance the Fibonacci retracement theory to this chart which can be found here under drawing tools You can see it here Fibonacci when you place it to this chart going from the high of 2018 in high in January To the low in February you can see that on the 50% retracement level There's a number of occasions when the 50% level at which comes to play at 3453 Actors both support and resistance on a number of occasions now if it's active as both support and resistance in the past It's likely it's more likely to do so again in the future But we can also notice that when the market was running out of steam and And just before it turned over on itself. It just went north of the sixty one point eight percent retracement level What's actually coincides with this red line here was the two hundred eight moving average So you've got a couple of indicators Converging it could it could suggest that the market is in an upward trend over the last month But because it reached the sixty one point eight percent retracement level some of the some of the buyers are getting out or perhaps Some of this some of the buyers are getting out after it didn't have Inevitable momentum of the steam to kind of go beyond the two hundred eight moving average So in the near term it's possible and we could see the market drift a little lower as I was saying I've not the indicator is pointing to a cooling of bi momentum But this area will be significant if you could take out the recent high Which is only created yesterday and that that comes into play at 3523 you can take off that it would be quite sick It could be quite significant and we go north of that the next big psychological number to keep an eye out for to the upside Will be three thousand six hundred and if you go beyond that The the February high of three thousand six hundred and thirty six and then if you go beyond that we could be looking at the January high of three three thousand six hundred and eighty nine And of course if you take out that we could be looking at at the all-time high up towards three thousand seven hundred and nine If you do drift lower work you potentially find support Well, you may find some support from the 50 percent retracement level which comes into play at three thousand four hundred and fifty three Like I mentioned we saw a lot of consolidation of that in the middle of April And there's a few occasions where that level acts as both support and resistance in February and March So it's a possibility that that area may act as support in the near term Should it should we drift south of that level though? We may have fun support also coming into play on this blue line here the fifthly moving average which comes into play at three thousand four hundred and eight Notice how it acted as both support and resistance earlier this month So it's possible it may act as a support in the near term But should we go south of there and we take out the the early February low of three thousand three hundred So three thousand three hundred and sixty six Then we could be looking heading back down towards the early February low of three thousand three hundred If you go south of that we could be looking at retesting the February low which comes into play at three thousand two hundred and 17 Well, that's all for me this week. Thank you very much