 Hello and welcome to CMC Markets on Tuesday the 10th of February and the weekly market update. Now last week I looked at the euro dollar and the risks that we could actually see a sharp rebound to 117. Now in the event we only got as far as 115.35 before those very good US payroll numbers and that's brought us all the way back to the low 113s. Now that doesn't completely destroy my higher euro scenario. As long as we stay above 112.05 then I think there's certainly potential for us to go higher but it really does depend on what goes on or what is going to be going on this week in Europe and the euro group meeting which is due out on Wednesday and the meeting of EU finance ministers and the Greek finance minister, Mr Varoufakis and obviously the outcomes of those talks there because I think essentially Greece is going to remain front and centre of anything and everything that affects currency markets and financial markets across the board and I think in that context it's very, very important that we look at the very important levels on the various charts that we look at. So for example euro dollar we're looking at 112.05 on the top side we're looking around about 115.35 but I'm not going to be looking at euro dollar this week I'm going to be looking at euro sterling I'm going to be looking at euro yen as well as obviously the FTSE 100 as well because on Friday we had some very good non-farm payrolls data but we didn't make new highs on the S&P. We did squeeze a little bit higher to around about 2070. Now you may recall I talked about that potential head and shoulders reversal with the right shoulder around about 2070 thus far we haven't broken above that and I think that's over concerns that potentially we could see a rate tightening a US rate tightening sometime this summer and I think that's tempering the upside just a little bit along the along the along the lines of obviously fears about a stronger dollar. So we can I'm going to move slightly away from the S&P this week and I'm going to look at the FTSE 100 in the context of the weaker China data that we've seen over the course of the last few days because the weaker China data is actually weighing on the FTSE and we are still struggling to get above that 6,900 level. So I'm going to look at the FTSE 100 look at the key levels on that. I'm going to look at euro sterling in the context of the inflation report that's coming out on Thursday and I'm also going to have a look at euro yen in the context of the lows that we saw earlier this year. So I'm going to start with the UK 100 FTSE 100 and it's the four hour chart and we're looking at a potential diamond formation here and it's quite it's quite a nice pattern. I like diamond formations simply because sometimes they can produce very good outcomes in terms of breakouts. The key level I think to keep an eye out for is really on the upside. It's the 6,900 level and let's also not forget 6,950 is the all-time highs. So we need to be aware that if we do break above the highs so far of the last 12 months that we could actually run into a bit of a barrier at 6,950. On the downside obviously we've got key support at the lows this month just around about 6,800 but overall it does appear that we're trading in a little bit of a range here with a big barrier at 6,900 and it's going to quite I think it's going to take a significant catalyst to propel it higher towards 7,000. So that's not my preferred outcome I think the likelihood is in the absence of any significant catalysts we could once again drift lower. So let's have a look at Euro Sterling. Now one of the questions I commonly get asked is how to identify my support and resistance level. Well in essence it's fairly simple if we look at this four hour chart we can see quite clearly that the chart is stair casing lower. We're getting lower highs and we're getting lower lows. Now I've drawn three horizontal lines on here, areas of what I would call support and resistance. Now if we look at the lows in mid-January they're around about 75,90 corresponded also to the rebound or impulse high from the 74 lows that we saw at the end of January around about 75,90. So support then became resistance on the pullback. So it's fairly straightforward support and resistance reverse their roles. Now we're back at the previous lows that we saw at the end of January. So that in essence becomes support and that's where any long positions would put their potential stop losses below that level. So essentially if we get a break below 74 then it stands to reason we could get an impulse move down through 74 down to around about 73,50 or even 73. So we are able to identify clear potential turning points in the market just by the use of very clear support and resistance lines and we can see that the market is moving lower, the momentum is lower because the highs are getting lower and eventually what will happen or what could happen is we could get a break of that 74 level. We won't preempt that break. If we stay above that 74 level we remain susceptible to a rebound and a potential short squeeze. So the key levels on Neuro Sterling are 74 on the downside and 75,90 on the top side. And it's a similar sort of story on Euro yen. Once again we've got a clear low round about the end of January. Again it's a four hour round about 130 but we've got what I would call a little bit of a consolidation going on here at the moment. So we can draw a line through the lows which is our trend line support and we can also draw a resistance line through the previous lows in the middle of January which also corresponds with the highs at the beginning of this month. So we can see from this chart that actually there's potential momentum for a possible break higher but that only would unfold if we remain above the trend line that I've drawn in from the lows. So looking at two completely different charts here we can potentially come to two different conclusions. We could get a push higher on Neuro yen and a push lower on Neuro Sterling but at the moment there does appear to be some evidence of potential base building in the Euro. But that really all depends on obviously the politics and less about the economics. So certainly Greece is going to be a factor, European economic data is going to be a factor, the uncertainty is going to be a factor but above all trade the charts and not the events. So that concludes this week's weekly market update. Just a quick reminder to remind you about Thursday's Analyst Debates with me and Colin Sizinski on Thursday at 3pm where we'll be hosting a webinar and basically discussing the key levels on the markets. We'll talk about obviously what we've discussed today but broaden that out as well to commodity markets and other currency markets as well. So until then or until next week this is Michael Houston talking to you from CMC Markets.