FTSE 100 6828 6855 resistance | 6802 support

FTSE 100 Support 6808 6802 6788 6768 6757 6742
FTSE 100 Resistance 6828 6830 6843 6847 6855

Good morning. Nice drop yesterday from the 6850 level, albeit rather slow at first. The bulls came back just above our long entry though, around 6810, to keep the price above 6800 overnight. They really need to hold 6808 today if we are going to get another push higher, otherwise 6750 is still beckoning! The bulls will need to break 6855 today, though as today is a month end we might see more weakness than strength. If 6855 is bettered then 6900 is likely.

US & Asia Overnight from Bloomberg

Mining stocks led declines among Asian equities outside of Japan as a resurgent dollar put gold and industrial metals prices on track for their first monthly losses since May. Japanese shares rose as the yen held near a one-month low, brightening prospects for exporters.

A gauge of raw-materials producers on the MSCI Asia Pacific excluding Japan Index sank to its lowest in almost four weeks. Gold and copper rose from their lowest closes in more than two months, while U.S. crude traded near a two-week low ahead of data that’s forecast to show American oil stockpiles rose last week. Japan’s Topix index of shares erased its decline for August as the yen traded near 103 per dollar and benchmark U.S. Treasuries extended their biggest monthly loss since June 2015.

Hawkish rhetoric from Federal Reserve officials over the past two weeks has fueled speculation U.S. interest rates will be raised this year, spurring gains in the dollar and putting pressure on prices of commodities denominated in the U.S. currency. Vice Chairman Stanley Fischer said on Tuesday that any rate increase will be data dependent, having previously pointed to employment figures on Friday as being of key importance.

“The Fed’s more upbeat mood and a summer of record highs on Wall Street have boosted the U.S. dollar’s yield appeal,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Payrolls is certainly very important, though there are strong indications that seasonal factors will ensure the headline reading will not provide the Fed with the slam dunk it needs for a September hike.”

More light may be shed on the matter when regional Fed chiefs for Chicago, Boston and Minneapolis speak on Wednesday. U.S. Treasury Secretary Jacob Lew is scheduled to comment on what to expect at the Sept. 4-5 Group of 20 leaders’ summit in Hangzhou, China. Canada and India are among countries reporting gross domestic product for the last quarter, while the euro area has unemployment and inflation figures due. Financial markets in Malaysia are closed for a holiday.

Stocks

The MSCI Asia Pacific excluding Japan Index was down 0.3 percent as of 12:03 p.m. Tokyo time, with raw-materials producers falling twice as much as any of the other 10 industry groups. The gauge gained 1.8 percent in August, poised for a third monthly advance.

Australia’s S&P/ASX 200 Index sank 1 percent as BHP Billiton Ltd., the world’s biggest mining company, and Rio Tinto Ltd. dropped more than 3 percent. Japan’s Topix added 0.9 percent as Mazda Motor Corp. and Nikon Corp. climbed more than 3 percent.

“The yen has begun to fully price in the possibility of a U.S. rate hike,” said Chihiro Ohta, a senior strategist with SMBC Nikko Securities Inc. “Investors were wary over what a 100-yen-per-dollar level would do to corporate earnings, but with the yen near the 103 level, those concerns will be alleviated.”

An index tracking the Hong Kong-listed shares of Chinese companies was headed for a 7 percent monthly gain, the best performance among 94 major equity benchmarks worldwide. The Hang Seng Index was set to climb more than 5 percent for the second month in a row, while BOC Hong Kong (Holdings) Ltd. jumped as much as 5 percent on Wednesday alone after reporting increased earnings and a special dividend. A Tokyo-listed exchange-trade fund tracking Brazilian stocks was unchanged as the impeachment trial of suspended President Dilma Rousseff neared its end. The nation’s central bank will review interest rates on Wednesday and is forecast to leave its benchmark interest rate unchanged at 14.25 percent for a ninth straight meeting.

Futures on the S&P 500 Index were steady after a drop in Apple Inc. helped drag the U.S. gauge down 0.2 percent in the last session. The company was ordered to pay 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally reduced its tax bill.

Currencies

The yen was little changed at 102.98 per dollar after sliding 1 percent on Tuesday. The currency, regarded as a haven along with Treasuries and gold, has lost 0.9 percent in August, set for its first monthly decline since May.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, declined 0.1 percent after rallying 0.6 percent to a one-month high in the last session. Fed funds futures put the odds a Fed rate hike at 34 percent for September and 59 percent by year-end.

“The dollar is likely to stay on a firm footing into the Friday payrolls report, but we’ll need to see a solid set of numbers for gains to be sustained beyond that,” said Ned Rumpeltin, the European head of currency strategy at TD in London.

Commodities

Crude oil fell 0.2 percent to $46.27 a barrel in New York before government data due Wednesday that’s forecast to show U.S. stockpiles increased by 1.3 million barrels last week. The price is still up 11 percent for this month, having surged on speculation informal talks among OPEC members in Algeria next month will result in an output freeze.

Gold rose 0.3 percent, trimming its monthly loss to 2.8 percent. Copper added 0.4 percent in London, reducing its drop for August to 6.1 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

I have a feeling that they will want to keep the FTSE 100 above 6800 today, and 6802 (s1) looks like a fairly key level. Below that we have the 10 day Bianca at 6788 for support (likely to hold as we dropped off the 10 day channel yesterday), and then the 20 day at 6757 below that. I have gone for a rise towards the pivot initially at 6828, and we also have the 30min coral here as resistance. Whilst the 2 hour chart is bullish at the moment, the bounce so far overnight from 6805ish has been pretty poor. On the 2 hour we have the 100 Hull MA and the coral both at 6809ish.

If the bulls can break that pivot level then yesterdays high at 6855 is possible, with 6900 above that.

I have plotted pink arrows at the 6802 level as it could do either scenario there – drop further or bounce back and at the moment it doesn’t look clear which one will play out. Generally today I am feeling bearish though, and think that shorting the rallies is a decent plan – 6830 and 6855 looking like good spots.

27 Comments

  1. Afternoon all,still early to be mentioning the Dow pivot at 459,although with the rubbish City spread it almost might as well be open and favouring that as a R than s1 at 403,yesterdays close was 54.3,a bit flat into today.

  2. Hey all
    Hope all’s well.
    Just a quick note – I’d put up more trades that I make, but I’m in and out so quick its usually too late to be useful. Call me sir scalpsalot, but its been incredibly good on the cash front over the last few weeks, so I’m not changing 🙂

        1. GBP/USD…..is cable………they used the first transatlantic undersea cable to trade the British pound and the American dollar so they nicknamed it cable………ive just closed out another +28 pips with a bit of size on had a stonking day on it…..1.85k :0)

  3. This is getting silly now…long added at 6780. I’m at £12 a point now which for me is getting towards brown pant time.

    Good data (ignoring oil) why is it dumping???? Is this a protest by the yanks to get the FED moving on rate hikes?

    1. I hope so, I’m getting well bent over!!!

      Still it may be helping Si so at least my pain is offset by his gain.

      £14 pt and raising. Will set stops

    1. I’ve got a red hot poker shoved up a place I better not mention….not nice but it’s all part of the game…..you are in fight of flight…..think in terms of probabilitys if you are running short of margin close a few contracts to free up resources….I would think it probably will go up a bit…..FWIW….

          1. My guess is it will rise again quite sharply ahead of NFP but it’s only a guess,it could do anything…

            1. Your right mate, I am comfy up to £10 but don’t like going higher. Pulled a few at 6pt profit.

              Off go karting now followed by beers. Good luck

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