FTSE 100 Support 6732 6730 6726 6718 6708 6680
FTSE 100 Resistance 6752 6755 6762 6873

Good morning. Fairly flat day yesterday with the long not really doing much but still getting a few points, before a rather nice spike right up to the order level at 6745 for the short and a nice drop down. However, that drop was soon retraced and we were back up in the mid thirties in no time. Overnight has seen decent strength on the futures, with the FTSE back at the 6740 level, mainly thanks to Apple results last night. Despite cooling iPhone sales, sales were better than expected. We will get a break out of this narrow 10 day Bianca channel soon – levels are 6762 and 6708 – just hard to say which way! May well be up if Japan announces stimulus and the UK gets a rate cut in August as has been inferred. We also have the Fed at 7pm later with their rate news. Dividend today is 2.4

US & Asia Overnight from Bloomberg

The yen plunged the most in more than an week and shares in Tokyo snapped a three-day slide amid speculation Japan¹s government is preparing to announce its stimulus plans. Gold fell ahead of the Federal Reserve¹s interest-rate review, while crude extended its slump.

Japan¹s currency dropped 1.2 percent against the dollar and the Nikkei 225 Stock Average soared 2.1 percent as FNN reported that Prime Minister Shinzo Abe will announce details of a 27 trillion yen ($254 billion) package this afternoon. Suppliers of Apple Inc. climbed after better-than-expected sales from the iPhone maker. Chinese equities reversed an early gain as small-cap stocks sank, sending the ChiNext Index tumbling 4 percent. Crude fell a fifth day, slipping below $43 a barrel ahead of data on American fuel stockpiles.

³Revived expectations for Japan¹s stimulus are pushing the yen lower,² said Jun Kato, a senior fund manager in Tokyo at Shinkin Asset Management Co. ³News of Abe announcing a fiscal package is stirring hopes the BOJ would also come up with more easing.²

FNN, citing an unidentified person, said Abe¹s stimulus package will include 13 trillion yen of low-interest loans. Almost 80 percent of analysts surveyed by Bloomberg forecast Governor Haruhiko Kuroda and his board will expand the Bank of Japan¹s record stimulus program Friday. The Fed reviews rates before Japan, with the U.S. central bank projected to keep borrowing costs on hold Wednesday, despite an uptick in bets on tightening this year.

Stocks

The MSCI Asia Pacific Index fluctuated as of 12:42 p.m. Tokyo time, trading near the highest level since Nov. 5. The Topix index gained 1.3 percent. Minebea Co., a supplier to Apple that makes backlights for liquid crystal displays, soared 15 percent in Tokyo. Hon Hai Precision Industry Co., which assembles Apple devices, rose 1.5 percent in Taipei.

The Shanghai Composite Index slipped 1.6 percent at the morning break, reversing a gain of as much as 0.2 percent. The gauge rallied 1.1 percent Tuesday. Hong Kong¹s Hang Seng Index slipped 0.2 percent, after reaching a high for the year on Tuesday. The Hang Seng China Enterprises Index lost 0.4 percent.

Futures on the S&P 500 Index increased 0.2 percent, while contracts on the Nasdaq 100 climbed 0.7 percent as Apple shares jumped almost 7 percent in after-market New York trading. Apple¹s boost
contrasted with an 11 percent after-market slide in Twitter Inc., which forecast third-quarter revenue that fell short of analyst estimates.

Earnings have been in focus this week, with results from Mitsubishi Motors Corp. and Nintendo Co. slated for release in Tokyo on Wednesday.

Currencies

After a two-day, 1.4 percent advance, the yen weakened 1.2 percent to 105.94 per dollar. Abe is set to speak at an event in Japan¹s southern Fukuoka from 1:20 p.m local time, according to the website of the Kyushu Economic Forum, which is organizing the event.

Economists see an increase in purchases of exchange-traded funds as the most likely way in which BOJ Governor Haruhiko Kuroda will add to stimulus this week, followed by a deeper cut in the negative deposit rate.

³The key is whether the BOJ will surprise us again on Friday,² Alex Wong, director of asset management at Ample Capital in Hong Kong, said on Bloomberg Radio¹s First Word Asia program. ³The Japanese central bank has surprised the market several times in the past few years so they are a little bit unpredictable.²

The Australian dollar jumped, then erased gains, after data showed inflation quickened. The currency dropped 0.4 percent to 74.70 U.S. cents after rallying as much as 0.9 percent. The trimmed mean gauge of consumer prices rose 0.5 percent in the quarter ending June from the previous three months, the statistics bureau reported.

Australia¹s central bank, in its minutes of its July meeting, signaled it was keeping its policy options open. Policy makers, who left the benchmark cash rate unchanged at a record low of 1.75 percent last month, make their next decision on borrowing costs on Aug. 2.

³The lift in the Australian dollar quickly faded because there is still a reasonable risk of a RBA rate cut next week,” said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia.

Commentary after the Fed meeting ³is more important for the short-term Aussie outlook. The Fed risks being more optimistic than their June statement, and that could help push the Australian dollar lower into the week¹s end.²New Zealand¹s currency fell 0.5 percent. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, added 0.2 percent following Tuesday¹s 0.3 percent drop.

Commodities

West Texas Intermediate crude slipped 0.2 percent, extending losses at its lowest price since April 25 as industry data indicated supplies at the main Cushing oil hub in the U.S. rose to a seasonal record.

³The general driver behind the negativity seems to be the excess crude and gasoline stockpiles,² Angus Nicholson, a markets analyst at IG Ltd. in Melbourne, said by phone. ³The market is very much in a down trend and it doesn¹t look like it¹s going to reverse at the moment. There is some key technical support around $40 a barrel.²

Gold for immediate delivery, regarded as a haven along with the yen and government bonds, declined 0.3 percent to $1,324.60, falling for the third time in four days. [Bloomberg]

FTSE 100 Outlook and Prediction

It will be mostly about the Fed at 7pm this evening and any action or plans for interest rates. Largely expected to remain as they are, any hint that they might be rising will have an effect on the indices. We also have UK GDP at 9:30 so might see some movement then, expected figure is 2.1% up from 2% previous. For today I am expecting a similar pattern to both days so far this week with a rise to the top of the 10 day Bianca at 6762 and then a drop back.

Support is 6708 for the 10 day channel also and the charts are still looking fairly positive. However, if the 10 day channel breaks (a 30min candle close above or below the levels) then I will look to trade in the direction of the break. So, fairly simple plan today looking at the 10 day channels and the daily pivot as the key areas.