 Hello and welcome to CMC Markets and Tuesday the 14th of June and the weekly market update and while Brexit risk is certainly taking up most of the headlines there are also a number of other factors that play certainly in the context of the declines that we're seeing not only in equity markets but also in sovereign bond yields and currencies as a whole particularly against the dollar. First and foremost let's start with the UK 100, the FTSE 100 and we can see straight away from this chart here that we've broken out of that potential head and shoulders pattern that we've been looking at and identifying over the course of the past few days and weeks that very very key support that we saw come in at the 60-50 area we have broken below that and that really does now open up the potential for further downside risk and in terms of the actual minimum price objective we're looking at with respect to this particular chart what we've done is I've taken the distance from the peaks in April from the lows in May and projected it downwards from the breakout point so if this is a true head and shoulders reversal then there's certainly potential for at least another 300-400 points of downside movement given the fact that we've now broken below that key 6000 level as well and the minimum price objective or the equidistant move from the April highs to the May lows brings us back to around about 5,670 What would negate that? Well, what would negate that would be a close and a move back above this neckline, this horizontal support and resistance line at 60-50, 6,050 so keeping an eye on that level there more importantly have we seen significant moves to the downside in other equity markets as well and the answer to that question is yes if we look at the S&P 500 we can see a similar downward move through that 2085 area that we identified as key support in our non-farm payrolls webinar a couple of weeks ago which are for those of you who saw it will know that we identified as a key support we've broken below that 2088, 2085 area, we've come back to this 2070 area which is now a very, very key level of support for the S&P 500 if we're able to hold above 2070 then we could see a pullback to around about the 2085, the 2090 area as denoted by this four-hour chart so while we've got significant concerns about slowing global growth after disappointing economic data in China disappointing economic data in Japan and obviously Mr Draghi's comments last week about the potential for further easing measures and the fact that bond yields not only in Germany which are now negative out to 10 years but also in Japan negative out to 15 years we've got the Brexit risk also coming into play an awful lot more now that we've seen a shift in the opinion polls towards the lead side and that's really been borne out by this particular downward move that we've seen in the cable chart as identified by this move here we've broken that uptrend line that we saw from the March lows, February March lows at around about 138, 35 we've broken below that there and now we're heading towards the next key support level which currently lies between 140.5 and 140.80 and actually given the lead that the lead camp currently have in the polls I'm actually surprised that the pound isn't significantly weaker than it actually is and that could be down to one important factor the Federal Reserve, the FOMC meeting that we've got later this week we've also got a very important Bank of Japan policy meeting later this week and I think the likelihood is that we're going to see the US Federal Reserve stay on hold for an awful lot longer than markets had originally anticipated as long as I was recently as two weeks ago and I think it's going to be very very important in that context as to how dovish or hawkish the Fed is with relation to its overall narrative I think it's probably unlikely that we will get a rate rise in July either certainly Fed funds projections predict a 15% probability of that happening and that therefore makes these levels around about 140 and 140.5 very very key support levels on the pound against the dollar certainly in the context of this island of price action that we've got down here and move below 140 certainly has the potential to open up the lows that we saw earlier this year so those are the key levels that I'm looking at at the moment certainly on the pound against the dollar also have a quick look at sterling yen have a quick look at that right now given the weakness of the pound and the strength of the yen that's likely to be a fairly interesting play over the course of the next few sessions certainly in the head up to the weekend we've seen a significant break out there in sterling yen which potentially could open up further declines towards and below the 150 level that's looking like it's going to be a very very key support level in the short to medium term so certainly been keeping an eye on that level and the 10550 area in dollar yen will the Bank of Japan start to become concerned about that 10550 area given the fact that it's a very very key support level was the lows in May it's thus far been the lows in June what will the Bank of Japan do with respect to mitigating the effects of the stronger yen at its policy meeting later this week all very key factors all key things to look out for in the coming days so that's it for this week once again thanks very much for listening this is Michael Houston talking to you from CMC Markets