 Good morning and welcome to CMC Markets on Tuesday, the 7th of April and this quick look at price action of the last couple of days. Before we get started, let's have a, obviously we need to have a brief disclaimer. I'm going to be going through a number of different products, asset classes, identifying key chart levels, key chart points and what have you, and trying to determine what the path of least resistance is in terms of direction going forward. Now that we've broken a number of key levels on the S&P 500, the US 30 and the German DAX because the rallies that we've seen in the past couple of days have certainly I think been positive in terms of overall sentiment and I think a large part of the optimism is being on the back of the fact that hopes are rising that the UK and Europe is over the peak of the virus and is on a downward track when it comes to the death rate and as well as the infection rate and the extent of the rebound in the DAX has seen more than a 20% rally from the lows that we saw in March. So I think what better place to start than the German DAX because the rally that we've seen on that in the past couple of hours has seen us take out the highs of last week. And as such, we could well see the potential for further gains going forward as highlighted by this chart here, the break of 10,190,10200 has seen us break above the 38.2 retracement level from the highs that we saw in February to the lows that we saw in March and could well see us as long as we stay above this breakout point head back towards 10,880, 10,900. So very, very key breakout taking place here, what's significant about this breakout is we've also seen it replicated on the S&P 500 and those of you who are regular viewers of my videos will know that I do look for correlation in terms of breakouts when I look at a number of the key indices. So the S&P, the DAX and the Nikkei 225 being I think the three highly correlated indices that I tend to look at for confirmation of potential breakouts as we can see similarly here, the highs in February, the lows in March, we've broken above last week's highs, the 38.2 Fibonacci retracement level at 2650 on the S&P we're currently around about 2716, could well head back to 2790 over the course of the next few days while the RISC sentiment remains largely positive. And I think what's also helping RISC sentiment is the fact that a number of countries have undertaken or announced a number of additional key stimulus programs, namely Spain, Singapore, Japan and US markets also got an enormous slug of rocket fuel overnight on reports that the US administration is getting ready with another $1.5 trillion stimulus plan over and above the $2 trillion they announced last month. And this one is set to be launched in May if the reports are correct. Obviously the rebounds are welcome. What these rebounds don't mean that an end to the lockdown or the lockdowns is imminent, but it does offer the prospect that the lockdowns could well last a shorter time frame than some of the worst case scenarios that stock markets have been pricing in during the month of March. A recession still remains a given. Hopes are rising though that it could well be manageable going forward and not turn into an outright depression. Now, one of the things that's given me a little bit of a cause or a little bit of a pause in terms of the breakouts that we're seeing in equity markets generally is the fact that the FTSE 100 is lagging behind, but the FTSE 100 generally tends to lag anyway, so I'm not overly concerned about that. As long as we hold above those lows that I identified in a non-farm payrolls webinar last week at around about $53.30, then we could well see a break of the $58, $80, $58.90 level, which is also $38.2 for the natural retracement level of the highs in February and the lows in March and potentially head back to $6,200 though. That seems to be a little bit of a bigger ask in the context of the move higher in the pound. So we've had a look at the key indices. Let's have a quick look at the Dow as well because I know that you guys like me to look at the Dow as well as the S&P 500 when we're looking at overall breakout levels. And we can see that the Dow has also broken above last week's highs as well, which in and of itself is also significant and those highs are around about $22.680. So the break above $22.680 is significant and could well auger a test, a retest of the $24,000 level over the course of the next few sessions as long as we hold above that very key level there. And given the fact that we have been trading in 1,000-point ranges, then it is quite feasible that we could reach that in fairly short order. Looking at currency pairs, let's start with the cable. We did see a little bit of a spike lower overnight on the back of the hospitalization of Prime Minister Boris Johnson. The early reports suggest that while he is in intensive care, he's not as serious as potentially he could be. That's not to say that his condition couldn't get worse and that could in turn prompt further weakness in cable. But at the moment, we do appear to be fairly resilient in and around that $122 area, but within the confines of the range that we've been in over the course of the past few days. There's still significant resistance in and around $124.8125. The bias does remain slightly towards the downside given the concerns about politics and what have you. But at the moment, we do appear to be finding a little bit of strength on any dips. But if we do consolidate and move below $122, then we could head back towards this $1,980.85 level. On the technicals on the dailies, the 50-day has crossed below the 200-day, which is historically a very negative signal. But the fact that both moving averages are fairly flat in nature makes me think that I shouldn't be overly too worried about this particular death cross. Sometimes it's not about the death cross itself. It's about the way the moving averages are behaving and both are fairly flat. So that would suggest that any down move is likely to be limited, though those words could come back to haunt me. In terms of euro-dollar, looking again, fairly solid support, as I indicated on Friday in the non-farm payrolls webinar around about $1,780. That key support level can be indicated by this red line across here. That's held quite nicely. While we're above that, then we could see further gains back towards $109.20 and $110. Still very much a range trade there, but it does appear to be the case that the dollar is starting to weaken a little bit as equity markets become slightly more buoyant. That dollar could well strengthen if equity markets start to sell off again. So again, it really depends on risk sentiment going forward as to how the dollar reacts. But certainly in terms of the US dollar index, the CMC US dollar index, which is a slightly better hybrid or representation of the actual dollar index that we have or the normal dollar index, it does appear to have shown evidence of a little bit of a breakdown there. The components of the CMC dollar index are slightly more reflective of the trade situation. 20% waiting of the Chinese currency or 20% waiting of the euro as well, which is in contrast to the 57% rating of the normal dollar index, which means that it's very, very highly correlated to euro dollar. This one has a much lower rating for the euro and it's in line with the waiting for the Chinese one. So it means that it's much less reactive to the moves in euro dollar and does appear to have broken down on the short term chart and could well see further dollar weakness going forward on that particular chart. If we just restore that FX watch list back to the way that it should be, have a quick look at euro sterling. That is starting to look slightly better bid over the course of the past couple of days. It found fairly decent support in and around the 200 day moving average at around about 8740, which coincides with these lows here. Let me just make that chart a little bit bigger so we can actually get a better idea. It's also looking as if the oscillator on the daily chart is starting to edge a little bit higher, which suggests that maybe we could see a little bit of sterling weakness back to around about 8910, 8920 in the short to medium term on any dips. Let's have a quick look at gold as well. That's finding a little bit of resistance in and around the 1680 level on the daily chart. If we move that back into the middle here, we can see that if we look at the price action over the course of the past couple of months, it is really struggled anywhere near 1680. And that's roughly just below where we are now it struggled on that particular day there we had a very long upper shadow on that candle. It only spent one day above 1680 on in March, and that was a negative candle before it drifted back all the way down to 1450. So the air is a little bit thin in and around the 1680 level. That's not to say that we can't go higher. But while equity markets are looking fairly well supported, the likelihood is that we could find it very, very difficult to rally in the short to medium term. Brent crude on the other hand is continuing to look very, very volatile. But if we look at the two hour chart here, we can see that the dips that we're seeing are getting progressively higher. And that would suggest that we could be on the cusp of a little bit of a short squeeze. And if we do break above these series of highs through here on the two hour chart, which currently coming around about $31 a barrel. If we get a break below, if we get a break above $31 a barrel, we could see a significant short squeeze higher back to $35 or $36 a barrel. The short positions are getting progressively squeezed over the course of the past two or three days. We can see the dips every rally. The dip has been a little bit higher, which is a classic example of short positions getting increasingly nervous. That we could see a little bit of a spike higher as we head into the prospective OPEC meeting this Thursday and the G20 oil ministers meeting, which is due on Friday. Okay, so that's it for this quick summary of the key chart points for this week. I'll be hoping to do a week ahead video later this week. Where I'll have a quick look at what's coming up over the course of the next week or so, which will be another four day week post Easter. As we look ahead to the events over the course of the next few days. So thanks very much for listening. It's Michael Houston talking to you from CMC Markets.