FTSE 1oo Support 6732 6720 6711 6710 6704 6690 6642 6544
FTSE 100 Resistance 6739 6753 6752 6758 6782

Good morning. The bulls certainly fought back last week to keep the FTSE 100 above the 6700 level, however we are now nearing the top of the 10 day Bianca channel at 6753. And actually tested this overnight and saw a little drop back. Both the 10 day Bianca and Raff channels have narrowed significantly so we will shortly get a breakout of that – up or down though, thats the question! The S&P ended last week at a new all time high. This week sees the BOJ and Fed meetings – traders hoping that that these central banks may sound dovish and keep the bullishness going.

US & Asia Overnight from Bloomberg

• Ringgit falls sixth day to lead Asian currency declines
• Asian stocks fluctuate after S&P 500 gained to a fresh record

The dollar’s advance weighed on precious metals as investors looked toward central bank meetings this week in the U.S. and Japan. The yen slid, while Asian stocks fluctuated after valuations rose to the highest in almost a year.

Gold extended its first back-to-back weekly drop since May as the greenback strengthened against most major currencies. The yen declined before a Friday policy decision, where Bank of Japan Governor Haruhiko Kuroda will face the most intense expectations for more monetary stimulus since 2013. U.S. crude traded near the lowest close since May, while nickel gained. Asia’s benchmark stock gauge swung between gains and losses after the S&P 500 Index ended last week at a fresh record.

The S&P 500 climbed Friday amid signs of strength in the American economy and speculation central banks will act to cushion any blow from the U.K.’s Brexit vote. An increase in purchases of exchange-traded funds is seen by economists as the most likely stimulus for the BOJ to announce this week, while the Federal Reserve is expected to stand pat on borrowing costs. Group of 20 finance chiefs indicated concern over the anti-globalization sentiment gripping the world at a meeting in China at the weekend.

“Market expectations of the Fed raising interest rates by the end of this year have increased significantly over the last two weeks, and it is likely that the Fed could be conveying a more optimistic message about the U.S. economy,” Vyanne Lai, an economist at National Australia Bank Ltd., said by e-mail. “This will likely bolster the strength of the dollar and weigh on gold prices.”

Fed policy makers meet on July 26-27, with traders pricing in 10 percent odds of a rate rise, while the probability for a move by December rose to 45 percent from 12 percent at the beginning of this month. Singapore reports on consumer prices Monday, and data on Taiwanese money supply are also due. Philippine stocks led regional gains before Rodrigo Duterte, the nation’s new president, gives his first state-of-the-union address.

Stocks

About the same number of companies rose and fell on the MSCI Asia Pacific Index, with consumer shares leading gains as of 1:11 p.m. in Tokyo. The Topix index was little changed, while Australia’s benchmark gauge rose 0.6 percent.

Nintendo Co. was the biggest drag on the regional gauge, sinking 17 percent after saying the impact of its hit Pokemon Go app on earnings will be limited.

New Zealand’s S&P/NZX 50 Index added 1 percent to an all-time high, after climbing 2.2 percent last week. The Kospi index in Seoul slipped 0.1 percent, while stocks in Hong Kong also declined. The Asian stock measure traded at 13.4 times estimated earnings over the next 12 months, near the highest multiple since August.

“Equity markets may hold up this week ahead of the BOJ and Fed meetings on hopes that these central banks may sound dovish,” Vasu Menon, vice-president for wealth management research at Oversea-Chinese Banking Corp. in Singapore, said by phone. “The hope of future action from policy makers offers more support in the short term even though valuations may not be compelling.”

S&P 500 futures slipped 0.1 percent following the benchmark’s 0.5 percent advance last session to a record 2,175.03. Telephone companies and utilities drove gains, with about 82 percent of earnings so far this season exceeding estimates. Shares of Verizon Communications Inc. and Yahoo! Inc. rose at least 1 percent on Friday amid prospects the former will announce plans to buy the Internet company’s core assets.

Currencies

Bloomberg’s dollar index, a gauge of the greenback against 10 major peers, maintained Friday’s 0.3 percent gain. The yen slipped 0.1 percent to 106.28 per dollar after retreating 0.3 percent last session.

New Zealand’s dollar weakened 0.3 percent, while the Malaysian ringgit slipped for a sixth straight day, losing 0.5 percent for the steepest decline in Asia.

“The rising dollar and pullback in commodity prices could begin to increasingly cause problems in the emerging-markets complex, which has been one of the biggest winners in the post-Brexit rebound,” Angus Nicholson, a market analyst in Melbourne at IG Ltd., said in an e-mail.

Sterling added 0.1 percent following Friday’s 0.9 percent slide, which was spurred by reports suggesting manufacturing and services industries contracted in July.

Commodities

West Texas Intermediate crude traded at $44.11 barrel after sliding 1.3 percent on Friday to its lowest settlement since May 9.
Rigs targeting oil in the U.S. rose for a fourth week to 371, the longest run of gains since August, according to Baker Hughes Inc. Money managers also added the most bets in a year on falling WTI prices during the week ended July 19, according to Commodity Futures Trading Commission figures.

“The general tone for the market at the moment is soft to sideways,” Ric Spooner, chief analyst at CMC Markets in Sydney, said by phone. “It’s being weighed down by U.S. dollar strength against a background of relatively high inventories and the fact the rig count has begun to creep up.”

Gold for immediate delivery slipped 0.4 percent to $1,317.05 an ounce. Silver lost 0.9 percent, while palladium retreated 1.1 percent.

Copper for three-month delivery added 0.2 percent in London, as nickel and zinc gained at least 0.6 percent. Speculators boosted their net-long position in copper to 18,284 U.S. futures and options in the week ended July 19, according to CFTC data released three days later. That’s up from 4,868 a week earlier and was the highest since March 29. [Bloomberg]

FTSE 100 Outlook and Prediction

For today I am thinking that we will retest the 10 day Bianca channel top at 6753 which we hit overnight and dropped back from. There are a cluster of resistance levels around here, including R1 at 6758 and a rising 30min channel top at 6752. A dip back to the daily pivot at 6710 would be a good play, but the bears might have the work cut out to get the FTSE 100 below the 6700 level this week.

Its mostly going to be eyes on the Fed and the direction for interest rate rises, plus any stimulus measures to keep the tin can moving down the road post Brexit. Funny old world sometimes! Anyway, the bottom of the 10 day Bianca channel is 6690 so you can see how narrow a range it is on there, with one of those channel lines likely to break this week. The charts say it will probably break upwards, logic says it should pull back a bit first. So, for today I am thinking a dip from the 6750ish area, and a rise from the 6710 area.

A dip below 6700 could find support at 6690, but equally if that breaks then thats a good sign that the bears are taking a bit of control. The 2 hour chart has support at 6720 and 6711 as well, and has now gone bullish.