 Hello, welcome to CMC Markets on Tuesday the 12th of January and the first weekly market update of 2016 and what a start to the year. It's been everyone has got their bare hats on today. Equity markets have pushed quite significantly lower over the course of the past week or so. Oil prices, even Chinese stock markets are once again undergoing a significant amount of turbulence and we've got all manner of predictions that oil prices could go as low as $10 or $20 a barrel. And it's this particular subject that I want to focus on for today's video. Brent crude, the likelihood of further losses, the fact that everyone is piling into the bear trade on Brent crude, that's flashing up warning signs for me so I'm going to outline some of the key support levels on the Brent crude price. Look at the Chinese one against the dollar and the significant pullback that we've seen in the dollar against the one since the massive depreciation that we've seen since the beginning of the year and also look at some of the key support levels on the UK 100, FTSE 100 and the German DAX because currently we're still above long-term trend line support levels and that does suggest to me that this overriding bearishness at the moment could be just could be a little bit premature. So we're going to make a start with Brent crude. Now a lot of investment banks have gone over bearish on Brent crude prices over the course of the last day or so targeting $10 or $20 a barrel. When a market starts to get to one way I start to get a little bit nervous and it is in this context that I want to have a look at this chart here up on my right hand side. It's the daily chart for Brent crude. We've broken below a key support level of around about $36 a barrel. We broke below that at the end of last year and we've pushed aggressively lower towards the April 2004 lows which is around about $29.90 so around about the $30 area. So that's likely to be a very very key support level. Below that we also have the 2004 lows which are at $28 a barrel. Now a number of the reasons that have been outlined for further Brent crude weakness has been further dollar strength and I'm a little bit skeptical about that. Notwithstanding the prospect that even though markets are looking to price in some extra rate hikes I'm not convinced that we're going to get them. So further dollar strength is probably not the prerequisite that an awful lot of people think that it is. So I think there's a good chance that we could get a significant short squeeze in Brent crude and I'm not going to get overly bearish on it until such times as we break below those 2004 lows at $28 a barrel. I think there's a significant room for a short squeeze back towards $36. Brings me on to the Chinese one against the dollar the offshore MNMB whatever you want to call it. We've seen a significant decline in the one and it's gone to a five-year lows against the US dollar as seen from this daily chart here. As we can see the rally in the dollar against the one accelerated towards the end of last year and now we've seen a significant pullback. Now if this pullback is sustained on a weekly basis then there is potential for further one strength and potential dollar weakness. I still think in the longer term that we're probably going to see some form of further one weakness but I think at the moment Chinese authorities are going to be incentivised to manage it on a much more managed basis simply because of the volatility that we've seen in equity markets over the past few days. Another reason for my overriding caution with respect to all these bearish calls is these two daily charts that I'm going to show you right now. First and foremost we've got the UK 100, the FTSE 100 and we're still above that trend line support from the 2009 lows which currently comes in around about 5,840. We can see it highlighted here with a little blue arrow and it's a similar sort of story also on the Germany 30, the German DAX. Same daily chart, same trend line support at the moment from the 2011 lows which is currently containing the downside. Well both those equity markets remain above those key support areas then the prospect I think for further oil price declines is likely to be fairly limited because the two at the moment do appear to be closely correlated. So that concludes the first weekly market update of 2016. I've gone into slightly more detail on some of the reasonings behind my analysis today on a piece on the news and analysis part of the cmcmarkas.co.uk website. You can find a link for it right here. Until next week this is Michael Houston talking to you from CMC Markas.