6815 support, 6830, 6852 resistance

Good morning. The big thing for today is that NFP news comes out in the USA today rather than tomorrow so likely to be a little bit lively at 13:30 today. The US is closed tomorrow for Independence Day. Yesterday saw the 6820 hit, the short order take and then a nice rapid drop to 6800 before the bulls came back. But they couldn’t break the daily channels at the 6828 area. The Bianca channel tops have moved up a bit to higher levels since earlier this week reflecting the slow rise we have seen. They are now at 6823 (20 day) and 6832 (10 day). The Raffs have moved up to the 6852 area, a level likely to be seen if 6830 breaks.

Construction Industry (news from todays Telegraph)
Britain’s construction industry took on staff at a record pace in June amid a surge in house-building activity, adding to evidence that the recovery is gaining traction and increasing the chance of an interest rate rise before the end of the year.

Strong demand for new homes pushed up hiring levels at the fastest rate since records began in 1997, according to Markit’s latest survey of the industry. Activity in the commercial sector also remained strong. [read more]

Asia Overnight from Bloomberg
Australia’s currency fell for a second day as the country’s central bank governor said it was overvalued. Asian stocks fell from a six-year high, while the U.S. dollar maintained gains versus major peers, before jobs reports and a euro-area monetary-policy decision.

Australia’s dollar slid 0.7 percent by 1:16 p.m. inTokyo, trading at 93.78 U.S. cents afterReserve Bank of Australia Governor Glenn Stevens said investors are underestimating the chance of currency losses. The MSCI AsiaPacific Index slipped 0.2 percent to 147.2, while Standard & Poor’s 500 Index futures lost 0.1 percent. The Bloomberg Dollar Spot Index added 0.1 percent after rising from a two-month low yesterday. Oil in New York fell a sixth day, its longest slump since May 2012, and platinum slumped 1.2 percent.

The Aussie is more than just a few cents overvalued and the risk of a “significant fall” is being underestimated, Stevens said in a speech today. The monthly payrolls report comes after ADP Research Institute data yesterday showed U.S. employment rose in June by the most since 2012, with more workers hired than economists projected. The European Central Bank meets today after enacting unprecedented stimulus last month, while in Asia, data on services industries is due.

“Stevens’s language is about strong as could be expected without introducing an explicit policy easing bias,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “If the ADP survey is indeed a harbinger of another strong payrolls report, then the U.S. dollar should enjoy a fresh wave of demand and knock Aussie towards 93 cents.”

Jobs
Economists estimate 215,000 workers were added to nonfarm payrolls in the U.S. last month, after an increase of 217,000 in May, according to the median of 94 estimates compiled by Bloomberg. The ADP report had payrolls up by 281,000, after economists predicted an advance of 205,000. Weekly jobless claims numbers are also due today, along with the Institute for Supply Management’s gauge of activity in services industries.

China Services
In China, a gauges of services from the China Federation of Logistics and Purchasing dropped to 55 from 55.5 in May. A HSBC Holdings Plc/Markit Economics measure of non-manufacturing sectors in China is also due today along with gauges for Japan and India and a Markit index of euro-area services. The ECB is projected to keep key interest rates on hold today after cuts last month sent the deposit rate into negative territory.

“The first quarter was weaker than most people expected, but we’ve seen a good rebound subsequently,” Tim Schroeders, who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “There’s growth in jobs data and the U.S. economy is accelerating, which has positive implications for the market.”

FTSE Outlook

FTSE Forecast
FTSE Forecast

Well it seems the bulls are still in town for the moment and a break above 6830 should reach 6852 today, with the next resistance above that at 6900. I mentioned yesterday that if prices held above 6800 I expect 6900 so I think we will see that. The daily pivot is 6814, so initial support there. As mentioned above the NFP news is out today so could scupper the bulls party, as the FTSE still hasn’t risen to its all time highs despite the strength in the US (and the UK economy).

I am thinking a rise this morning from the pivot to 6852, to coincide with the NFP release. Depending on that we then push for 6900, or drop, and below the pivot the next support if 6750. Worst case 6724, a move below which would invalidate all the rising potentials for the time being and probably start a decline to 6500.

I am going to go for a bit of a contrarian view today, as you can see from the arrows below, with a drop from the 6852 area for my plan. However, if it doesn’t drop from there it will get 6900, and possibly 6944 next – just teasing past the all time high before hitting resistance.

I have gone for the Bianca channels offering the first resistance (and yesterdays high) then the Raffs at 6852 for the next resistance. Of course, i am also treating today a bit like a Friday so using lower stakes and expecting the unexpected!

58 Comments

  2. Hmm the bookmakers know something. Bet365 aren’t offering any fixed odds bets for the daily ftse market.

  3. Comon, anyone going long 17000? LOL
    I just cannot go long at these highs. It doesn’t seem to be dropping but not falling either.

    1. I agree I couldn’t go long at these heights either, yes it seems bullish but surely a correction is due

    1. In the other hand, we can just go for 7000 in this summer and then tank to 6500 in September/October. That+s when QE ends and I’m looking to that period with many cautious sentiments

  11. all stops will be wiped out at nfp, for everyone that enter at this levels. That could be a good place to short at 6859 with 6871 stop, but only after nfp.

  12. Been away from my desk Senu, yes short trigggered at 51 so am short at the moment

  14. Managed to scalp 30 pips today long, after losing out on tuesday… We’ll done PMS you must be killing it…

  17. Bet365 have suspended the hourly markets now too. I’m expecting some big movements now

  20. I cannot believe it, I guess 282K for a competition and one guy guess 283K and won the bottle of wine , grrrrrrrrrrrrrr

      1. you bet…. not interested in this game until I see something that catches my eye

  25. who could believe it, that we are already in the top again. Almost 200 points in less than a week

  28. If you have your stop and are willing to loose that money, hold on Senu. You might be lucky… the Rsi is overspeeding 😀

  30. as usual! all indices running at record highs and ftse struggling to walk let alone run!

  31. Senu, you asked about 6900 – roughly 40 points away. In the daily timeframe, the index is now traveling above the Jan 01 trend (it crossed above yesterday), reinforcing the positive gradient of the latter. The falling short-term Jun 01 trend is beginning to look irrelevant. I think that after 2 months of range-bound constriction, there are bags of room for expansion. On the 4-hr. front, momentum is healthy. More generally, perhaps good economic news is beginning to replace QE hopes and fears as the prime mover of US markets. Yesterday, I said that I thought I was ‘on’ for about 6880. Today, progress towards 6900+ is looking to me like a reasonable possibility. This is just how I am thinking at the moment – not intended as a cast iron prediction. 🙂

  32. Javed, still holding that short for the summer ? It looks like there will be no summer, maybe a late summer in September.

  36. 2 consecutive days trying to go short… the 1st exit with residual gain, the 2nd just deleted before gone triggered. ANd now tomorrow… ?
    Will FTSE have the power to break 6880 and continued this run ?

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