 Hello and welcome to CMC Markets on Tuesday, the 12th of May and the weekly market update. What are the last few days it's been? Last week I talked a little bit about potential reversal pattern in the Bund, the DAX and the Euro, and in particular the monthly reversals and certainly I think we have seen some evidence that bond markets are now starting to come under pressure as is the DAX and we are starting to get what I would suggest is a little bit of upward pressure on the Euro dollar. Now we also had what I would categorise as a fairly mixed US payrolls report and I think that once again pushes back the possibility of a potential US rate rise sometime this year and I think on the margins I think that helps underpin the Euro dollar, notwithstanding the fact that Bund yields are starting to wedge back up again as they are pretty much all across Europe and I think that is likely to continue to put downward pressure on DAX. Now I'm not going to look at the DAX this week or the Euro for that matter but I am going to have a look at the Bund because I certainly think in the context of the declines that we've seen thus far I think there is a danger we could actually push quite a bit lower on the Bund and I think in the process that could weigh on the DAX and could push the Euro higher. Moving on to the pound, obviously we've seen a significant move higher in the pound in the wake of last week's surprise election result the Conservative Party win. Once again there though I did warn of the prospect that we could see a higher pound simply on the back of the fact that we saw significant weekly reversals on the weekly candle charts and also a mildly positive reversal on the monthly candle chart and I think the likelihood is that here once again we could see further sterling gains against the dollar and I think that could be in I think that could be very significant in the context of the inflation report that we're getting out from the Bank of England on Wednesday as well as the unemployment and average earnings data that we also get out on the same day. I'm then going to finish up by having a brief look at crude oil prices to see whether or not we're going to get any further upside there and a potential as a potential head and shoulders reversal forming on the Nikkei 225. Okay so let's start off with the Bund now last week I referred to a potential monthly reversal on the Bund chart and that does seem to suggest that we could well see high yields going forward in that particular asset. So let's have a quick look at the weekly chart that I'm just putting up in front of you and you can see that we're currently testing a key Fibonacci retracement level it's basically the 38.2 percent retracement level from the lows that we saw at the end of 2013 to the peaks that we saw earlier this year. Now we did spike below that on the previous week last week but we closed well above it. I think given current momentum and given and given reduced deflationary concerns within the euro area I think momentum is on the side of the price action and the price action that we've seen over the past four weeks we've had four successive weekly declines and if we close below this 152 area this 150 area on the support level then I think we could well push quite a bit lower to where we are now to the 50 percent level which currently sits around the 150 level on the Bund chart and that's potentially pushing the yields back up towards the 1 percent level. So let's move on to the pound against the dollar. Now over the past few weeks we've managed to slowly ratchet higher. We've pushed above the 50 day moving average we've pushed above the 100 day moving average and we've now pushed above the 200 day moving average at 156.30. We've also pushed above the 38.2 Fibonacci retracement level from the highs that we saw in mid-July to the lows that we saw earlier this year and that's significant at 155.7 if we can hold above 155.70 then I think current momentum should take us up to around about 158.80 which is the 50 percent retracement level of the entire down move that we saw from the peaks in July. We can we can better illustrate that particular chart by moving onto the weekly chart where you can see the the bullish weekly engulfing pattern that I identified four or five weeks ago and we can see that having taken out the peaks that we saw earlier this year in around about March momentum is now moving us towards the confluence of the 50, 100 and 200 week moving average on the top side around about 158.80, 159. One other thing to bear in mind with respect to the pound against the dollar is the client sentiment indicator. I find that incredibly interesting particularly in the context of what's happening right now with the pound. At the moment if you look at client sentiment on the pound against the dollar it's predominantly negative despite the fact that we've pushed significantly higher and I think that more than anything else is going to help underpin the pound going forward simply because the market is completely the wrong way around. Now earlier I talked about reduced deflationary concerns and one part of that has been the rebound in crude oil Brent crude and WTI but what we've seen over the past few days is potentially potentially a bit of a reversal starting to form in. We've got a gravestone doji on the daily charts more importantly with what I would call an evening star candlestick pattern. That is potentially bearish but a word of warning it does require confirmation. Now I've drawn a horizontal line right across the bottom of this evening star formation and that currently comes in an intersex with potentially the trend line support from the 2015 lows. So we've got two areas of support. One is around about $60, $62, $63 a barrel. If we break below there then we could potentially head towards the trend line support from the lows in 2015 as well as the 50 day moving average. So certainly potentially keep an eye on crude oil. We could well be running into a little bit of a top but we need to see confirmation of that top with a break below horizontal support. I'm going to finish up very briefly with a quick keep your eye on chart. At the moment there's potentially a pattern forming but there's no guarantee that it will play out. Looking at the Japan 225 the Nikkei 225 and potentially we've got a head and shoulders reversal forming with a neckline just above $19,000. If we also look at the Hang Seng as well again we've got a fairly similar pattern forming in Asian markets. So I think these are two markets the Hang Seng and the Nikkei 225 that are worth keeping an eye out for in the event we get a break below the key support and the key support is outlined by the neckline that I've drawn on this particular daily chart. So as you can see there's a fair number of potentially decent patterns starting to form up on an awful lot of the charts that we've looked at over the past two or three weeks. If you have any questions on any of the above, obviously tweet me at mHusen underscore CMC. Otherwise, thanks very much for listening. This is Michael Huston talking to you from CMC Markets.