 Good afternoon, ladies and gentlemen and welcome to today's Monday market webinar on the 23rd of April with me Michael Houston and the absence of David Madden Thank you for your patience. I'm hoping that all of you can hear me loud and clear Just having to do a little bit of housekeeping first Disclaimers risk warnings So anything that you hear today should not be construed and Investments advice one way or the other what I'm hoping to do is Show you where the key support and resistance levels are with respect to various markets looking ahead to what I think are the key the key events this week and Whether or not the gains that we've seen in European markets over the last few days Are likely to continue and certainly I think what we've seen over the past four weeks is a fairly decent rebound in European markets The big question is whether or not these gains are likely to Extend further or whether we could Start to find a little bit of short-term resistance Before I get started I just like to run a couple of questions past you with respect to the format of these webinars like to garner some feedback to try and improve the Quality of the content that we deliver to you guys Because ultimately without you guys. I've been talking to myself If you do have any questions that you would like to put to me, and please feel free to Respond to chat or alternatively Drop me an email Let's email address here them doc Houston at CMC markets calm What we'd like to know is what you like about the webinars What you don't like about the webinars? I think that's probably preferable because ultimately I think we gain much more information and feedback and what you don't like Do you want the webinars to be platform focused? Or do you want them to be more about the markets technical analysis educational that sort of thing because I think More feedback that we get from you guys about The format of the webinars the better that we can tailor them for your overall consumption But also I think in terms of educational content as well Also, if you want to direct questions to me now just respond to the chat request Which I'm just about to send to you Right now. So do you have any questions? I've just sent a little chat request there In the meantime Let's let's get cracking and I think those of you who are regular Listeners to my periscope updates because I generally try and do periscope updates between 7 30 and 9 a.m. In the morning if I have time available to do them usually I Do but sometimes my calendar dictates that I can't But in this morning's update I talked about the recovery in European markets For successive week weekly gain from the lows that we saw in March Does appear to be running into a little bit of resistance around about the 200 day moving average, but also the 50% retracement of the entire down with we got here now for those of you who haven't seen this This is the new HTML 5 platform slightly different from the The flex next-gen Platform I've got in front of me as you can see it's Probably a little bit more responsive a little bit more snappy in terms of response time But also I think It's a little I think it's I think it's a little bit easier to use as well So look at looking looking at the overall direction at the moment What we've seen with respect to the DAX is for the last three days to spy the fact that we get close higher on Friday We've traded a little bit sideways below this 12,648 12,600 and 50 area For the last three days. We're trading sideways. I'm taking a top-level view of this and as we can see from here We've got one two three four successive Higher candles a little bit of a sideways consolidation here But what we're also seeing is I think a slightly Firm at home to the US dollar and one of the key approaches that I like to look at in terms of what markets are doing I don't just like to look at equity markets. I also like to look at what interest rate markets are doing as well And interest rate markets have been particularly You know particularly interesting over the course of the past two or three days If we look at the US 10-year Treasury, you've seen a significant up move in US 10-year Treasury yields Sell off in bomb markets over the course of the past few days And I think that speaks to a slightly more elevated Concern about Interest rate Expectations we look at the 10-year Treasury here. We're back above we're back edging back towards the levels that we last saw in 2014 2013 the 3% level on US 10-year Treasuries and that's giving us slightly more bid tone to the US dollar we can see that No better illustrated I think with respect to how the dollar index is behaving in This particular chart here and we can see that despite the fact that we've seen a Significant rebound in the dollar what we haven't seen is it break out towards the top side? So we've seen big sell-offs in the cable. We've seen a much We've seen a significant push higher in dolly yen What's important though in the overall context of where the dollar is going is we haven't broken about this series of peaks But we see it sort of beginning in March But also in the middle of January and also these lows back in September So we've seen this we've seen the dollar go big But what we haven't seen is a significant break out in the overall Direction of the dollar Even though the pound has broken below a very significant support level at 139 6570 On the back of those comments that we saw at the end of last week by Bank of England So the overall outlook for currency is the overall outlook for equity markets It is definitely a case of trade what you see And for me, I think that's probably more important than anything else because for me I think we've seen a rebound in equity markets The big question that I'm asking at the moment is whether or not we are near the end of this current rebound Or whether we can go further and for me I think if we're going to see further gains in equity markets Then we need to take out this significant resistance level here. Now. I'm looking at the DAX You know, I may be making it slightly more complicated than it needs to be for me correlations very very important If we're going to get break if we're going to get a break higher in the DAX We also need to see a break higher in the FTSE 100. We also need to see a break higher in the euro stocks 50 Neither of those three indices Over the course of the past three or four days has shown any signs that it's on the cusp of breaking higher Which suggests to me that ultimately if we're long equity markets Right now we need to think about potentially starting to fade this particular rally If we do edge back towards this resistance level around about 12,640 and the 200 day moving average We're also starting to see fading momentum on the oscillator as well So the DAX is telling me that we're starting to get a little bit stretched on the upside We're below a key resistance level if we also look at the euro stocks 50 My mindset is pretty similar here as well Similar sort of story if we break this out just scrolling out here. We can see a similar pattern unfolding with respect to the euro stocks 50 Let me just make that chart slightly bigger so that you can see it in slightly more detail again We're up against a Fibonacci resistance level albeit not the 50% one on the DAX But the sixty one point eight percent retracement level on the euro stocks 50 But also the 200 day moving average as well So both the euro stocks 50 and the you and the German DAX are pushing against Their 200 day moving average and finding a little bit of resistance there as well If I turn that off you can see the value. It's around about 3,509 We're about 15 points away from that And we are getting a little bit of roll over on the oscillator But as yet we haven't broken higher and I think for equity markets in Europe to break higher What I would want to see is a break above the euro stocks 50s 200 day moving average But also a break above the 200 day moving average on the German DAX as well So until such times as we get that We're gonna have to be very very cautious about being aggressively long European equity indices over the course of the next two to three days. Let's not also forget. We're coming up to the end of the month 30th of April next Monday So you could see a little bit of month and positioning as well on the back of the four weeks of Rebounds that we've seen over the past few days If we look at the France 40 or the CAC Caron We can see here that we have what we do appear to have broken above the 61.8 Fibonacci retracement level on the CAC Caron But because we haven't broken above That key level on the Euro stocks 50 or the German DAX it does make me a little bit concerned There may be the move in the CAC Caron is looking a little bit overextended if I just get rid of that line There we go, that's gone We we could we could well drift back down on the CAC Caron We have broken higher on the CAC Caron But we haven't done it on the Euro stocks 50 or the Germany 30 and if we also look at the UK 100 It's a similar sort of story We have seen some outperformance on that But again, I'm a little bit cautious About being overly long given that we opened higher But we've gone aggressively lower and that actually is a little bit worrying the fact that we've gone lower On the footsie 100 despite the fact the pound is weaker quite considerably weaker Normally you tend to get a seesaw effect on the pound against the dollar on the footsie 100 You get a weaker footsie You usually see a stronger pound you see a weaker pound usually get a stronger footsie at the moment The two are moving in the same direction and that is a little bit of a concern The footsie is not getting a boost from a weaker pound, which suggests we could get a retest of the seven thousand three hundred and twenty area That acted as resistance on the move higher two to three days ago So current weakness in the footsie could well find a strift back towards seven thousand three hundred and twenty In the short to medium term Simply because we haven't been able to get back above the two hundred day moving average though momentum is starting to turn more positive We could we'll see a drift back down in the short to medium term So the key events this week are going to be the European Central Bank rate decision in the wake of that PMI data That we saw earlier today was much better than expected actually French and German flash Manufacturing and services PMI was slightly more positive in April That would appear to suggest that the slowdown that we've seen in some of the core economic data out of Europe is Probably just a little bit of a blip and we could see a little bit of a pickup We'll get some further. I think we'll get some further indications of South German businesses perceive The business environment in the German IFO, which is due out tomorrow That should give a better indication than the ZEW which was very disappointing last week Came in at a five year low of minus eight point two Which was rather surprising when you consider that we've come up higher for four successive weeks in a row Looking at Euro dollar again. This is symptomatic of Watching a Watching paint dry on a wall. We've traded sideways for pretty much most of this year The likelihood is we're probably going to retest these 122 area There's solid more solid support at 121 65. We can see that here. We've also got a significant Resistance level around about 125 40 sport 121 65 Is this a topping formation or is this a sideways consolidation? I'm tempted to say it's just a sideways consolidation at the moment As I say decent sport between 120 160 and 122 Probably going to get a retest of that over the course of the next few trading sessions It's unlikely that we're going to get a significant breakout of this trading range Until we get a significant move higher in US yields at the moment We're getting a little bit of dollar strength, but we're not getting a significant breakout of the dollar In respect of the dollar index and until we do the likelihood is we're probably going to continue to range trade this particular pattern of the moment so keep an eye on the dollar index in the context of This this resistance level here coincides with 121 60 122 on euro dollar. Let's not forget the US dollar index is around about 57% Euro so there's a good correlation between the two and at the moment There doesn't appear to be any indication that the dollar is about to break out of its wider range if we look at the pound against the dollar we can see from This chart here that we've broken below the April lows which were around about here Earlier this month of 139 75 But again as with the dollar index We do appear to have quite a bit of leeway to come quite a bit lower we can come as low as 137 10 Which was the lows that we saw earlier this year Which could in essence give us potential a double top here what we were unable to do last week Was break significantly above the 200-week moving average? What is more concerning about this particular weekly candle? Is it's a key reversal? So that suggests to me that we could be susceptible to further sterling weakness towards this 137 10 level Over the course of the past over the course of the next two weeks ahead of next month's Bank of England rate decision so Mark Carney did throw a little bit of a curveball at us on On Thursday night Friday morning. That's really I think undermined Short-term narrative of a stronger pound. We could well test towards this one thirty seven ten twenty area Over the course of the next couple of weeks as a result of that slightly weaker narrative So certainly in terms of a weaker pound against the dollar that does appear to be Certainly does appear to be a possible outcome towards this 50-day It's 100 day rather moving average now that we've broken below the 50-day Likely here is we're probably going to test lower on the basis of this technical weakness in the pound against the dollar chart What's slightly more concerning is also? The rebound that we've seen in euro sterling I've been bearish on euro sterling for quite some time And we do have we do appear to have rebounded quite strongly higher But we are pushing against some key resistance levels on this particular chart here So the chart that I'm the resistance level that I'm paying particular attention to on this particular chart Is located here? This was wrong chart It's around about eighty eight twenty though if we draw a line through these peaks here It's around about eighty eight twenty there or eighty eight Which is also where the 50 and the 100-day moving averages come in So we could see some natural selling interest coming around about 87 90 88 10 on euro sterling if we do test back up towards that key level there I think what's more important is also the fact that We did we had a very strong lead positive Weekly Campbell as well last week and that could well Prompt a little bit of a rebound back towards the top end of the recent range that we've seen over the past Few days, but overall I can't see euro sterling moving out of the range that we've been in over the course of The past few weeks. It's pretty much Normal service being resumed. What is slightly different is dolly in and Dolly in could be On the cusp of a significant move higher 108 20. I've talked about it in the chart forums earlier today Still on course for return to 108 20 and even potentially 109 20 Which is the top of the cloud resistance that we've got up here. We've seen some decent games on dolly in We could see a little bit of resistance between 20 and 30 But overall now that we're back within this cloud resistance We're also We're also looking to trend higher. We'll draw a trend line through these lows here Here we go Nice little trend line through there so any pullbacks are likely to find decent support through here and We could well potentially retest the top of this cloud resistance here It's always 108 and a half and 109 50 over the course of the next few trading sessions So I think the likelihood is we're going to get a slightly firmer dollar against the yen Seeming seeing is how closely correlated they are with respect to US Treasury yields tends to be a fairly positive correlation there So as long as we're above 2.9% on US Treasury yields Then we could we'll see a firm a dolly in these yields start to slip back and dolly in is also likely to slip back as well So that's dolly in also keeping an eye on oil prices and Oil prices and US interest rate yields are likely to be closely correlated as well Now some of my recent periscope updates in the morning. I've been talking about crude oil prices and We've now broken above 71 65 we've continued to hold above that key level and while we do so I think there's a decent chance despite what President Trump was tweeting last night about OPEC and the fact that his Allocation whatever you think of it that OPEC is artificially propping up prices For me, this is about trading what you see and at the moment While we're above the 71 65 area on US crude prices Then the line of least resistance for crude prices is for a move higher It's also more important in terms of the technical picture on Brent crude And this is just as true as it is for WTI. The technical picture is also supportive of a move higher So you could argue well crude oil prices generally tend to move higher on the back of a weaker dollar at the moment The dollar is strong, and yet crude oil prices are continuing to age higher That may well be true But at the moment now that we've broken above this resistance level is Fibonacci level Which I've drawn in from the 2014 highs to the lows that we saw in 2016 If I blow this chart up we can see that we've consolidated a move above this 50% of the tradesmen level at 71 65 but more importantly We've also broken above the peaks that we saw in the beginning of this year So on a technical basis that should be supportive of Further gains for the oil price. I would only revise that Outlook if we drop below this 71 65 area Now we had another go at it in the middle of last week But we weren't able to sustain the move lower. We closed back above it until such times as Oil prices Brent oil prices close below this 71 65 area on Brent then the likelihood is we're probably going to have another look at $80 a barrel whatever the outcome of that would be in terms of Limiting the upside in equity markets prompting concerns about inflation. The next key resistance level on Brent is 61.8. It's 82 dollars a barrel if we go back to how the market behaves in 2014 and This 82 dollars a barrel level here in the space of four weeks We went from 82 dollars To 70 dollars in very short order There's not really anything in terms of resistance levels between here and here So until such times as we break back below 71 65 71 50 the line of least resistance or Brent at the moment is from move towards that 80 dollars a barrel and 82 dollars a barrel the next resistance level Let's look confirmation for that on in terms of the WTI because the two do closely correlate and whatever you think about you a shell production and the fact that Shell producers are likely just increased production in response to that These two can move independently of each other. We've seen the spread between the two move apart we have broken above in the case of WTI Above the highs that we saw earlier this year. That's 66 dollars and 78 77 there are thereabouts We've seen the market break above that we are running into a little bit of a resistance Around about this sorts of levels up here, but if we look at the way the market's shaping up It doesn't really look that toppy. Yeah, we could we could we could well drift back all the way back here But at the moment as in Brent WTI the momentum Continues to edge ever so slightly higher. Yes, indeed the breakout hasn't been in any way Hasn't been in any way as substantial as it has in Brent But nonetheless, we are managing to hold fairly comfortably Above this 50% retracement level that we've seen drawn in here So while the breakout hasn't been in any way Substantively positive for WTI. It's still nonetheless holding above the previous peaks from earlier this year and that on a technical basis is fairly positive So certainly keep an eye out on Brent and WTI It looks to me as if the momentum is still positive for a move higher to or 72 72 50 and potentially even higher I think if we do break above $70 a barrel on WTI We could see a few stops get triggered on the basis of the fact that it's a round number So paying particular attention to WTI, but also paying particular attention to Brent crude as well Let's move on to Dollar CAD and Aussie dollar because last week we saw the Bank of Canada keep interest rates unchallenged and That has prompted a little bit of a rebound in dollar CAD a bit of Canada weakness It was never probable. It was never really likely that the Bank of Canada was going to raise rates Last week in Shadow of the Fed it is finding a little bit tricky To get back above the 50-day moving average, but also this little resistance level that we've got here if I draw in a Resistance level through there We can see that 128-20 there is a decent area of Resistance, I can just tweak that to extend it to the right We can see around about 128-20 there's a decent area of support for Dollar CAD So decent area of resistance my mistake decent area of resistance in the dollar CAD Which in the short term could catch the current upward momentum Also, you could find that further gains in the oil price Could limit some of the Canada weakness that we've seen over the past few days Certainly keeping an eye on that particular level there, but also We look at just let's redraw that just click on it delete it That's gone So we've broken higher through there we could run into resistance here This was also a head and shoulders reversal. We did meet our minimum price objective So that that pattern there is pretty much completed having broken lower And now the next key resistance on dollar CAD is 128-20 So keeping an eye on that for further potential gains going forward Last but not least, let's look at the Australian dollar 15-minute show up. Let's look at it on a slightly longer term basis Pushing up against a very key support area on Aussie dollar. So this is a big level for the Aussie here We've seen a little bit of a Significant sell-off in the past few days if you draw this trend line in from The lows in 2016 Selling on a big big support level on Aussie dollar Also the lows that we saw earlier this year if we break below this support level here Then we could we'll see further losses on Aussie dollar and then move down towards around about 75 so Round about 75 you just click on that button there And see the lows there. It's around about 7633 so I'll be looking for a break of 7620 to Push down towards around about 75 and a half if we hold above 7620 then we could get these rebound Banks around about 7680 So keeping on that key support there Any other questions ladies and gents, please feel free to send them over Otherwise, I'll wrap this up any questions looking for them now Yes, no, or otherwise Okay, well That's it for this week as I say just a quick just a quick feedback What do you like about the webinars? What don't you like about? webinars and do you want them to be more platform focused or Markets focused because at the end of the day, it's all about you feeding the information back to us and us tailoring them to your Individual requirements otherwise, I'd like to thank you all for your attendance today and Have a good week trading as I say if you have any questions, please send them over to me in doc Houston CMC markets.com or Tweet me at mHuson underscore CMC I'm on Twitter to answer any questions that you might have. Thanks very much and have a good week trading