 Tuesday, the 3rd of May and the weekly market update and we're starting May on the back foot for equity markets despite the fact that we've come off two successive months of gains in March and April. May's got off to a little bit of a weaker start. The dollar has started to come under an increasing amount of pressure. On the back of reduced expectations that the US Federal Reserve is likely to raise rates this year. I think the expectation that we could well see a June rate rise is continuing to diminishing. This week is going to be a very important week for economic data more broadly. More importantly, we've seen some significant breakouts in a number of key currency pairs, three of which I'm going to look at today. To begin with, our pound against the dollar has broken higher. Despite all concerns about Brexit risk, the pound continues to recover from the lows that we saw earlier this year. Dollar yen has continued to come under pressure. It's broken below that key 106 level that we highlighted as a key level as far back as two months ago and Aussie dollar has also slipped back quite sharply after the Reserve Bank of Australia unexpectedly cut rates by 25 basis points to 1.75%. So let's first and foremost start with the pound against the dollar because we have broken above the downtrend line from the August highs, which currently comes in or has just came in just above 146. We've broken above that and we're closing in on the 200 day moving average which currently comes in around about the 148.70 area. That remains the next key target going forward. It's also a 61.8 extension from the head and shoulders breakout that we talked about a couple of weeks ago and the likelihood is given the direction of travel with respect to the pound against the dollar that we're probably more likely to see 150 than we are to see now 140 over the course of the next few weeks. This despite the fact that manufacturing PMI in the UK at its lowest level in three years so certainly Brexit risk is feeding in to a very weak manufacturing sector but you also have to price in the fact that the manufacturing sector more globally is also in recession as well and that's likely to have significant spillover effects to the UK manufacturing sector as well. We do appear to be slightly overbought on the pound against the dollar at the moment which does appear to suggest that we could be at risk of a little bit of a pullback but overall I think as long as we stay above 145 then the balance of probabilities does appear to suggest that the direction of travel or the line of least resistance for the pound at the moment is for a test of the 148 80 149 level highlighted on this daily chart here. The dollar weakness story continues with respect to dolly yen as well. Now a few weeks ago we highlighted the possibility that dolly yen could go to 106 that now appears to have played out. We are now currently looking to test the 200 week moving average which currently comes in around about the low 105 so that's going to be a very key level on a weekly basis. Yes we are very oversold if we hold above this 200 week moving average we could get a rebound but more broadly from this weekly chart in front of you that I'm currently displaying the line of least resistance does appear to suggest that we could be could well be on course towards the 100.75 level which is a 50% retracement of the overall up move from the lows that we saw in 2011 to the peaks that we saw in 2015. So at the moment we've broken below 106.50 we're approaching a very key support level in terms of the 200 week moving average around about 105 about the 105 level and that's going to be a key level on a weekly basis but as long as we stay below 107.80 then the prospect of further dollar losses and further yen strength seems to be the line of least resistance at the moment. Moving swiftly on to Aussie dollar the Aussie dollar is the only currency today thus far that's performing worse than the US dollar after that surprise cut in the RBA headline interest rate what we haven't as yet done is broken below the trend line support coming in from the 2016 lows currently comes in around about 75 20 75 30 we've also got potentially a little bit of a neckline support coming in pretty much around at the same level so at the moment the Aussie dollar remains in an uptrend despite the surprise cut in interest overnight and we need to be keeping in a very close eye on this this double support level around about 75 20 otherwise the line of least resistance would have still appear to be for further Aussie strength while above this trend line and further dollar weakness moving on to later in the week we've also got non-farm payrolls webinar on Friday that starts at 115 if you want to sign up for that please go to the education section of our website otherwise that's it for this week this is Michael Houston talking to you from CMC Markets