Asia rises | Brexit rally continues | FTSE 100 6580 resistance 6480 support

FTSE 100 Support 6516 6480 6387 6350 6307 6238
FTSE 100 Resistance 6559 6585 6605 6636 6653

Good morning. Well, didn’t see that coming yesterday afternoon. Good long entry at 6310 and then short entry at 6410 which got blown apart by Carney’s comments about possible rate cuts in the summer and further measures as well. Bad timing on that short entering. Sterling continued to fall initially, contributing to the FTSE rise from the 6310 area. The US is closed on Monday for their Independence Day holiday, so we may see a bit less bullishness today ahead of that. European markets also rose at the possibility of central bank stimulus, with the DAX climbing 0.7pc and the CAC 40 advancing 1pc. Wall Street also enjoyed its third consecutive day of rises, with US stock rising by more than 1pc.

US & Asia Overnight from Bloomberg

  • Yen rallies as data show ongoing decline in Japan prices
  • China’s official PMI matches estimates, Caixin gauge misses

Asian stocks rose, on track for their best week since April, as investors bet central banks will limit the fallout from the U.K.’s decision to leave the European Union. Oil resumed gains with the pound.

Shares from Japan to Korea drove a third day of increases in the region, with markets in Hong Kong and Thailand shut for holidays. The yuan extended its weekly slide versus the greenback after a private gauge of China’s manufacturing industry unexpectedly fell. Oil climbed following its best three months since 2009, buoying the Malaysian ringgit, while sterling and the yen trimmed weekly declines. Metals rose, with silver climbing to the highest since September 2014. Bond yields in Japan and Taiwan fell to all-time lows.

Pledges from central banks around the world helped halt a two-day rout in global markets following the vote in favor of Brexit, which took the pound to a three-decade low and sent global stocks down the most since the financial crisis. Governor Mark Carney signaled the Bank of England could cut interest rates within months to shield the British economy, and odds of the Federal Reserve raising borrowing costs as planned this year have dropped to less than 10 percent, according to Fed funds futures.

“Markets are reacting positively to the supportive interest rate environment,” Chris Green, director of economics and strategy at First NZ Capital Group Ltd. in Auckland, said by phone. “With interest rates remaining low for longer, the concern is what policy options are left for central banks if we see an even softer patch for the global economy.”

Stocks

The MSCI Asia Pacific Index added 0.4 percent as of 2:06 p.m. in Tokyo, on track for a 3.4 percent climb on the week.

The Topix index gained 0.6 percent in Tokyo, while South Korea’s Kospi index jumped 1.1 percent. Japan reported a raft of data before markets opened, with both the core consumer price index and the jobless rate matching economists’ estimates, while the Tankan survey of business sentiment was slightly better than expected.

The Shanghai Composite Index was little changed. China’s official factory gauge retreated to the 50 dividing line between improvement and deterioration last month, while a private gauge came in at 48.6, missing the median economist estimate of 49.2. A measure of services perked up, underscoring the two-speed pace of growth in the world’s second-largest economy.

Futures on the S&P 500 Index dropped 0.1 percent following the underlying index’s 1.4 percent surge Thursday, which left it up 1.9 percent in the quarter and erased its June decline. Contracts on the FTSE 100 Index added 0.9 percent, rising a fourth day. The European Central Bank is considering loosening the rules for its bond purchases to ensure enough debt is available to buy in the aftermath of the Brexit vote, according to euro-area officials familiar with the discussions.“There’s no doubt that central bankers are helping to underpin this market and take some of the risk out,” said Quincy Krosby, a market strategist in Newark, New Jersey, at Prudential Financial Inc., which oversees about $1.2 trillion. “This is a commitment from central banks to keep the liquidity flowing into the market, and that’s crucial.”

Currencies

The pound strengthened 0.1 percent to $1.3325 after falling 0.9 percent on Carney’s comments alluding to a potential rate cut. After being torpedoed on the Brexit result and falling to a 31-year low, sterling has recovered somewhat, paring its drop this week to 2.6 percent.
For more on the political to-ing and fro-ing following the Brexit vote, click here.

The yen snapped a three-day retreat, climbing 0.3 percent to 102.83 per dollar after the Japanese data showed core consumer prices dropped for a third straight month, and household spending also declined.

The won jumped a fourth day, poised to climb 2.9 percent in the week, as the ringgit touched an almost two-month high.

The yuan slipped 0.1 percent to 6.6530 per dollar, and is heading for a weekly slide of 0.5 percent. China’s currency weakened more than 3 percent last quarter, the most since the nation unified the official and market rates at the start of 1994.

Commodities

West Texas Intermediate crude increased 0.6 percent to $48.62 a barrel, clawing back some of last session’s 3.1 percent slump. The commodity jumped 26 percent in the three months through June as declined in U.S. supply fueled speculation the global oil surplus is easing.
Copper for three-month delivery fell after the official China PMIs, before reversing course to add 0.3 percent. Nickel climbed 0.7 percent and zinc rose 1 percent. The London Metal Exchange LMEX Metals Index rallied the most in two years last quarter.

Gold headed for a fifth weekly gain and silver jumped as much as 2.9 percent to the highest since September 2014.

Bonds

Treasuries and Asian bonds rallied, with Taiwan’s 10-year yield dropping to a record after the central bank lowered its benchmark interest rate in a widely expected decision. Japan’s 10-year yield tumbled to an unprecedented minus 0.255 percent. Two- and five-year yields also set lows as the market surged.

Treasury 10-year note yields fell two basis points to 1.45 percent as of 1:49 p.m. in Tokyo, according to Bloomberg Bond Trader data. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 PredictionWell what a week this has been. When the leave result came through last Friday I don’t think many expected us to be knocking on the door of 6600 this week, but rather 5500. Anyway, its been a good run for the bulls, helped with rate cut and stimulus talk – can’t beat Central Bank intervention to keep the markets rising. For today we have the pivot at 6480 for support, and resistance at 6590 from the rising 30min channel. The long off the pivot worked well yesterday and thats probably a good level to try a long today if we get an initial dip. However, I am more inclined to think that we get a rise to the resistance level to start with today, before a more gradual decline on profit taking this afternoon. The US is closed on Monday so we may see a dip later on profit taking in the US. It’s also the first of the month – typically sees bit of a rise first thing as new money flows into shares. The 10min chart has been on a weak sell overnight from the 6560 level, but is within a rising channel – with support at 6500 and resistance at 6650 and 6700 – so if it gets really bullish again then we might see both these levels! Keeping it tricky to call that’s for sure.

30 Comments

  1. Morning all I’m personally not going to bother actively trading today…..I have a small short that’s about 70 underwater….if it goes to 6700 I will add other than that I’ve got better things to do with my time…..watching from a distance and doing other things ….good luck everyone…..I would suggest keeping position size small for a while……

  2. Evening all….well what’s going on? Is it goin North of 6600 or back down to 6500?..its looking bullish just now but if the Dow sells off into weekend and with NFP next Friday I would think a drop down in the Dow is quite likely……on the other hand the last jobs report was 38k so it won’t need much to improve on that figure and the positive BS sentiment could drive it up…… I really have no idea where we go from here…..

    1. Well I’m asking myself…who in their right mind would be investing in shares with the worlds economy like it is?……..

      1. Mind you as a second thought….if the jobs number does rise dramatically next Friday will it bring the threat of the “supposed ” interest rate threat back into play……and cause a sell off on the Dow…..lots of head scratching going on?

  3. tmfp you were an anchorman on Nicks board……you are doing the right thing to have your extended break …….hope you have a great time…….but you will be missed mate…..

  4. Come on Anstel man up and pull ya self together. Tmfp will be back. In the mean time you’ll have to take his place as anchorman. All that knowledge you gained from him, time to put it to good use. lol.

    1. Ahhhhh there is life …….greetings Coombsy…..:0) hey I’m the same old anstel …..just my sentimental side coming out as I digest my dinner….Hey yeah no worries :0)…..just this Manipulation is a little disconcerting……I can handle it though…..been through it all before two years back……you have to admit though it’s quiet on here at the moment…….

        1. Oh and another thing….it’s funny how tmfp decides to have a break when it’s getting pushed up…..he will be back in time for £100pp scale up shorts from 7100 :0)…..

  5. Ftse up 600 points in 5 days……ha ha ha ha……oh I f…in love it….what a laugh ,,,,I mean,come on……I’ve got a very small bladder……there’s only so much p*ss you can take out of me :0)

  6. Hey WSF are you lurkin?you usually do Friday nights……before crackin open a few tinnies and ordering cod roe from your local chippy…..come on mate we need to kick some life into this board……

    1. Hey Si…..you must be ŵatching as well if your still holding that 6390 short….I bet your liking this drop….:0)

        1. It is looking very strong at the moment Si for sure……and yes it’s bent…..it’s a computer game……no relation to reality at all……..Could go anywhere next week.. But we have had a 600 pt rise in the week….suppose it’s not out of the realms of possibility we could see a further 200 pt upside but likewise a trip down to 6400 is equally likely……if you have a lot of resources I’d hold it ….there will be a point in the future when you can exit for zero loss and if you have a large amount of funds sat in a bank gaining zero interest you could use that to ride out the storm…..it’s really bad trading but if you have a lot of money why not use it to keep yourself in the game….good luck whatever you do…..and stay positive no matter what….goodnight mate….

  7. Well Anstel I reckon there was plenty of authorisation to buy everything in sight to hold up ftse value at all cost. Institutions were under orders to prevent any real panic selling from everyone. I reckon next week it will slow up and float around the 6400’s for a while until the politics gets sorted out.

    1. Well I’m short from 6505 so let’s see……..been playin around on occasion today with a little theory…….I’ve took a middle of the range approx around the 6535 area earlier and put two £2 pp trades on in opposite directions at the same time….so totally hedged within a point of each other…..then I waited till the short side gave me between 5-10 points then sold it which left the long side open…..worst case senario it hedged my main position short if it dropped and if it dropped a lot the short would just swallow it up anyway……worked a treat….took between 5 and 8 points each way four times. Paid for my tea..:0)

      1. Sounds good, personally I try to keep things simple and only really have one trade going at any one time. Don’t like the putting on multiple trades in same direction and waiting for it to come good. Too scary for me. I’m still saving hard so when I come back trading with real money have enough to have a good crack at it and will get nicks membership to add to the support / learning.

        1. Your right about it being quiet. ….. Time of year, holidays, brexit, plenty to distract people I guess.

  8. so will ended the week at 6590… think we will see 7000 before we see 6000, thanks Mr Carney the city boys will be on champagne & caviar this weekend!! some experts saying 8000 year end…

    1. he a politely plumb happy chappie…. anyway its buy buy buy central banks will bail out all the elite…

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