 Hello and good afternoon and welcome to CMC Markets on Tuesday the 10th of May and a quick look at the markets this week. Now a few weeks ago I looked at the Golden Cross which was the 50 and the 200 which is the crossing of the 50 and the 200 day moving average and which is generally perceived to be a fairly bullish signal and we looked at it in the context of how it was affecting the S&P 500 and I issued a note of caution with respect to that indicator on the basis that ultimately the 200 day moving average wasn't really giving any significant clues as to its overall direction. Now the 200 day moving average is I think the key average in this equation. Now we've seen the start of the beginnings of Golden Crosses on a number of other key markets this week namely Brent Crude and WTI Crude but also potentially we have one forming on the pound against the dollar and in the same way that I talked about introducing an element of caution with respect to the S&P 500 I would urge you to adopt the same level of caution with respect to the two charts that I'm talking about right now. So we're going to have a look at WTI first and foremost and I think this chart is particularly important in the context of this overall conversation and you can certainly see on the basis of this chart here that we certainly do have the makings of a Golden Cross but the 200 day moving average is declining and generally the most powerful indicators when it comes to a Golden Cross is when the moving averages are either flat or pointing in an upward direction and that clearly isn't the case here. That being said oil prices are in a significantly positive uptrend and though while we have seen a little bit of a peak over the past few days or so ultimately until we break this uptrend line here momentum still remains positive. So in essence you could potentially get in front of this particular move but it has a high level of risk attached to it. Therefore I think the key support level on WTI in this instance is really around about the $41 a barrel mark which equates to these peaks here and this minimum price objective from this double bottom breakout that we talked about a few weeks ago and this series of peaks here. Now ultimately if we change that to a weekly chart it gives us a slightly different outlook with respect to the crude oil price and certainly it does look very very overbought on the daily on on the weekly chart but not so much on the daily chart. It's a similar sort of story for Brent Crude. We can look at a similar sort of chart set up here and once again potentially we have the makings of a golden cross. Now in this case the moving averages haven't as yet crossed but again the gradient of the 200 day moving average suggests that downward momentum in the long term still remains intact which means it's very unlikely we're going to get an explosive upward move. Same rules apply with respect to WTI. Have a look at this key support which is around about the $42 a barrel mark which also coincides with the 50 day and the 200 day moving average and the oscillator is starting to move down towards the oversold area. So those are two potential golden crosses but they are weak patterns on the basis that the 200 day moving average is declining and as such it's inevitable that the two will cross and really then it's just a question of whether we get any further upward momentum. Moving on we're going to look at euro sterling on a similar sort of basis with the potential here for a little bit of a reversal given that we have the Bank of England week the monthly Bank of England rate meeting as well as the inflation report. Currently on this four-hour chart on euro sterling we are trading in a little bit of a range. The top of that range currently comes in around about 79.30 79.40 the bottom of the range comes in around about 78.60 but what's interesting about this chart is if we take it out onto a daily chart we've got the makings of a potential head and shoulders reversal with the right shoulder around about 79.40 79.50 so ultimately the upside resistance is around about the peaks that we saw at the end of February but also through the middle of March as well as the peaks this month so we can see straight away a very key resistance level 79.40 50 along with support of the last two or three days around about 78.60 with neckline support quite a bit lower at this line here. What we're also seeing is the oscillators still not quite overbought but it's starting to get there. Certainly if we look at it in the context of a weekly chart we've seen a significant weekly reversal the key question now is whether this weekly reversal translates into further losses ultimately that will be determined on a breakthrough 78.60 and this neckline support right down here. Last but not least given the fact that it's a big week for sterling and the inflation report on the Bank of England meeting on Thursday we're going to be looking at cable and this cable chart is not looking anywhere near as constructive as it did a few weeks ago we've got a bearish daily reversal on the dailies but we are finding a little bit of support around the lows of this week as well as the 200 day moving average again here sorry the 100 day moving average again here we have got the 50 day moving average starting to rotate higher which does appear to suggest that short-term momentum is starting to turn more positive even though long-term momentum still remains predominantly negative overall I think if we look at a monthly chart on the pound against the dollar we can see if we zoom this all the way out we have a bullish monthly reversal earlier this year back in March then we have April and currently we have May so on a very long-term chart actually the cable chart probably looks more constructive than anything else and the fact that we've broken out of this inverse head and shoulders reversal does appear to suggest that we could find a little bit of support just above 143 to push on back towards the highs that we saw at the beginning of the month so that's it for this week once again thanks very much for listening this is Michael Houston talking to you from CMC Markets