 Hello and welcome to CMC Markets on Friday the 12th of January 2018 and happy new year to all of you out there. Now pretty much it's been a case of normal service has been resumed we saw a very positive end to 2017 and that has carried over into the first couple of weeks for 2018 certainly in the case of US markets which have once again hit new record highs as well as the FUSI 100 which has also managed to post new record highs and is on calls to close higher for the sixth week in succession and that's quite a significant run given the fact that the pound is also on calls to make its highest weekly close since June 2016 and before the Brexit referendum against the dollar so what are we going to be looking forward to for the upcoming week well we've got a host of important economic data coming out not least we have the latest UK inflation numbers for December as well as retail sales for December now over the past week or so we've seen US inflation numbers and European EU CPI numbers come in slightly weaker than expected and that is somewhat surprising given the fact that we've seen crude oil prices rise at least 56% since the middle of the summer so you sort of have to ask yourself you know where that when these this high inflationary pressure that we're seeing in particularly oil prices and gasoline prices is going to filter through to the headline number we're not seeing any evidence of it thus far certainly in the US and the European Union where core prices have dipped back below 1% but certainly in the UK we do have high levels of inflation and we did come in at 3.1% in the November numbers which prompted the Bank of England Governor Mark Carney to have to write to Philip Ham in the UK Chancellor to explain why the Bank of England had missed its inflation target now expectations for December offer inflation to moderate slightly to around about 3% but they're still going to be at fairly elevated levels and I think there's a good chance that we could stay at these sorts of elevated levels for at least another couple of months and the reason for that is because usually in January we get very high inflation data come through in terms of travel fares rail fares bus travel and what have you and that's likely to keep CPI in and around that 3% level we also have retail sales numbers latest retail updates that we've seen from UK retailers have been a bit of a mixed bag but certainly they've been nowhere near as bad as I think people had originally feared food retail in particular was very very strong and we've got UK retail sales for December coming out on Thursday now expectations for UK retail sales are I think a little bit on the negative side we saw a very big 1.2% rise in November largely I think as a result of Black Friday we could see or we are predicting economists are predicting a 0.8% decline that does seem rather a lot given the fact that Cyber Monday will come into the December numbers as well as I think a significant amount of pre Christmas spending as well and now general retail was a little bit on the weak side but again in general retail there were some bright spots so what we've seen over the course of the past week is we've seen record highs for the let's see we've seen record highs for the US and we've seen the euro dollar breakout above the top side the previous September highs at 1.295 now that is significant but we do have to be careful about suggesting that we're going to move significantly to the upside on euro dollar because what we do have is a significant retracement level at around about 1.2170 so I think we could get a squeeze up to 1.2170 if we do break above that then really that does open up the top side quite considerably towards around about 1.26 the reason those levels are important is because they are Fibonacci retracement levels of the decline from the 2014 highs to the lows that we saw at the beginning towards the beginning of 2017 at 103 so 1.2170, 1.2180 very big resistance level but also a move above 1.22 could certainly open up 1.26 the pound is also broken back fire it's broken above 1.35 what we haven't done as yet is broken above the September highs of around about 1.3660 but here as in euro dollar we are approaching some very key resistance levels again 2014 peaks around about 171.92 172 pre Scottish referendum and the lows at 1.1980 or 1.1950 depending on where you take the low from 38.2% retracement of that entire down move comes in around about 1.38 so at the moment we're on course to post our fourth successive weekly rise in the pound and post our highest weekly close since since in the middle of 2016 before the Brexit referendum and that could well be significant going forward certainly I think there is a there is an expectation that we could push significantly higher so it was around about 1.3830 initially which was which was this these lows here in early 2016 and just above that around about 1.39 which is the 38.2% retracement level from the entire down move from 2014 to 2016 other things I will be keeping an eye out for this week will be the latest China Q4 GDP numbers the trade numbers were a little bit disappointing for December we saw a little bit of a drop-off in import data and I think that was largely as a result of a slowdown in China's oil consumption and we've seen Brent crew prices move above $70 a barrel potential reversal may be in place here if we break below $69 a barrel on close below $69 a barrel this looks like a shooting star or a Greystone doji so certainly keep an eye out for a little bit of weakness in oil prices and we've also got a very key central bank decision this coming week as well the Bank of Canada is due to make an announcement on its latest policy announcement now we saw the Bank of Canada raise rates twice last year shadowing the Federal Reserve we just saw a very decent positive employment report out of Canada and as prompted speculation we could see another 25 basis point rate rise by the Bank of Canada over the course of over the course of the next day or so now the one thing that could stay their hand with respect to a rate hike is the NAFTA talks and uncertainty over them but certainly I think the expectation is we will see a 25 basis point rate rise this coming week from the Bank of Canada it would be a bit of a surprise if we didn't give them some of the decent economic data that we've seen out of the Canadian economy in the past few days resistance on dollar CAD is around about 12670 support around about 12380 so again at those are the key levels there we've also got the US Bayes book the latest EU's CPI numbers which again keep an eye on the core number and keep an eye on the headline number 1.4% is the headline number and 0.9% is the core number if they continue to remain on the slightly softer side then I think the hawkish rhetoric that we saw from the December minutes of the ECB meeting could be dialed back somewhat particularly if euro dollar is able to sustain this current move above the 120 level so that's it for this week don't forget to tune into the Monday market webinar at 12.15 this is Michael Houston talking to you from CMC Markets