Asia gains but FTSE near 6385 resistance. 6330 support

Support 6328 6319 6310 6257 6194
Resistance 6372 6374 6386 6401

Good morning. Well that was a trending day and a half yesterday. Trending days don’t suit my style of trading which is based off key levels for trades, which is why I was a bit quiet yesterday in case you’re wondering. Its results season this week, coupled with some relief that we finally broke 6200 saw the bulls grab their chance for 6330 and then nearly the 6375 area. Asia was strong overnight but the FTSE has remained fairly static at the 6360 level. 6385 is looking fairly key for any early rise as we have the top of the 10 day Raff there.

US & Asia Overnight from Bloomberg

• Singapore dollar slides most in three months on policy shift
• Korean won drops after election; ringgit falls with oil

Asian stocks gained for a seventh day, the longest winning streak in a year, to extend a global rally underpinned by renewed optimism about China’s economy and the outlook for U.S. earnings. Regional currencies weakened as Singapore unexpectedly loosened monetary policy.

Financial stocks were the biggest drivers of gains on the MSCI Asia Pacific Index after JPMorgan Chase & Co. reported better-than-expected earnings. Energy shares were the worst performers among 10 industry groups as crude prices retreated. Singapore’s dollar slid the most in three months after the local monetary authority said it will no longer seek appreciation. Neighboring Malaysia’s ringgit fell the most in three weeks, while South Korea’s won slipped to a one-week low following parliamentary elections. Gold dropped for the third day in a row.

Singapore’s surprise move comes on the heels of policy easing from India to Norway as central bankers around the world strive to bolster their economies amid uneven energy markets and concern over the global outlook. Signs of improvement in China’s economy and a marquee U.S. company defying expectations for a lackluster reporting season has encouraged a bout of equity-market optimism. Speculation oil prices will soon find some support is also key, as Russia and other major producers prepare to meet in Doha April 17 to discuss an output freeze.

“Central banks will continue to ease policy,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors Ltd., which oversees about $120 billion. “The weakness that we’ve seen in the U.S. dollar and the fact that the Fed is going slowly now is allowing other countries to come out and ease. That is what we need. Pessimism around earnings growth had gone way, way too far. This rally has more to go.”

U.S. inflation data on Thursday may influence expectations for the timing of the Federal Reserve’s next interest-rate increase and the euro area will also release consumer-price figures. Finance ministers and central bankers from the Group of 20 nations will meet for talks in Washington, while Bank of America Corp. and Well Fargo & Co. are due to report earnings. China is scheduled to release first-quarter economic growth data on Friday.

Stocks
The MSCI Asia Pacific Index added 1.1 percent as of 12:10 p.m. Tokyo time. Japan’s Topix jumped 2.1 percent, headed for its highest close of the month, and Hong Kong’s Hang Seng Index rose 0.8 percent.

Markets in India, Sri Lanka and Thailand are closed for holidays Thursday, while Korean trading resumed with President Park Geun Hye having failed to win a majority in parliamentary elections held Wednesday. The Kospi index rose 1.1 percent from Tuesday levels, led by banks and industrial companies.

Australia’s S&P/ASX 200 Index increased 0.9 percent after prices for iron ore, the country’s biggest export, gained for a third day on Wednesday. Futures on the Standard & Poor’s 500 Index were down 0.1 percent following the benchmark’s two-day rally.

Currencies
The Singaporean dollar slid as much as 1 percent to its low for the month in the wake of the monetary authority’s switch to a neutral policy stance of zero percent appreciation versus a basket of peers, something last seen at the height of the global financial crisis in October 2008. Twelve of 18 economists surveyed by Bloomberg had predicted a policy of appreciation would be maintained.

“We thought the hurdle was high for a shift to neutral,” said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “Although the MAS said that they have no intention to depreciate the domestic currency, I don’t see this as necessarily the end of the easing cycle.”

The ringgit weakened 0.7 percent versus the greenback and New Zealand’s dollar slid 0.9 percent. The Bloomberg-JPMorgan Asia Dollar Index, a gauge of the region’s 10 most-used currencies excluding the yen, fell to a one-week low.

”Singapore is seen as a bit of a bellwether for the region,” said Mirza Baig, head of Asia Pacific foreign-exchange and interest-rate strategy at BNP Paribas SA. ”So if MAS is easing and accommodating some weakness in the Singapore dollar, then the market assumes there will be a similar impact in the region as well.”

The won weakened 0.6 percent from Tuesday’s close as the ruling party’s election loss undermined President Park’s ability to enact her economic agenda in her final years in office.

Commodities
Crude oil fell 1.1 percent to $41.29 a barrel in New York, after retreating 1 percent on Wednesday from its highest close since November. U.S. inventories rose last week to highest level in more than eight decades even as production fell below 9 million barrels a day, government data showed. Suppliers meeting April 17 should agree on steps to ease a glut of 2 million barrels a day, said Iraq’s Deputy Oil Minister Fayyad Al-Nima, without saying if his nation will cap output.

Gold fell 0.8 percent as global stock gains eroded the appeal of haven assets. [Bloomberg]

FTSE 100 Outlook and Prediction

After that rise yesterday we might well have a bit of a consolidation day as we have some key daily resistance at the 6375/6385 area first thing. Above this then 6401 is R1 and we are back to breakout territory if that breaks. With the daily pivot at 6328 I think we may see a dip down towards that area as profits are banked. Below the pivot the 2 hour chart has support at 6311 where we have the 100 Hull MA, which if the decline is slow today then may well have risen to be near the pivot area later today, so 6328 is a good spot to go long later on this morning, if we get a slow dip down from the 6385 area. So, thats the plan for today really, short at 6385 and look to go long at 6330. Hopefully we get some reaction off the levels rather than having another trending day. If we do break 6401 then it will be worth flipping to long.