Support 6198 6194 6185 6169
Resistance 6247 6278 6336
Good morning. Well the bears certainly appeared yesterday with a fairly slow and steady decline form the 6284 level at 6am, with a 6220 low being recorded. All certainly helped the gold long and that looks like a good move banking at 1270 now as its dropped back overnight. Unfortunately the FTSE short order didn’t trigger as we never got the pop up to 6295, however judging by the emails a lot of you stayed short all day. The 2 hour chart is looking more bearish now with resistance at 6279 and a good short entry here.
US & Asia Overnight from Bloomberg
- Investors wary of events from Brexit vote to Fed meeting
- Hong Kong markets resume with mainland China still on holiday
Caution prevailed in Asia on Friday, with stocks slumping and the dollar climbing, as investors girded themselves for potentially seismic events this month including Britain’s referendum on European Union membership and the Federal Reserve meeting.
The MSCI Asia Pacific Index headed for its steepest loss since May 13 and paring a third weekly gain. Commodity producers led losses after industrial metals sold off on Thursday, while gold fell for the first time in three days and U.S. crude oil held below $51 a barrel. A gauge of the greenback’s strength advanced for a second day, while demand for havens boosted debt, with 10-year Japanese yields falling to a record low.
“In the next two weeks there is the Fed and Bank of Japan meetings, the U.K. Brexit referendum, Yellen testifying to Congress, U.S. May retail sales and CPI,” David Croy, a senior rates strategist in Wellington at ANZ Bank New Zealand Ltd., said in a note to clients. “The market is very dovish on the Fed, and the risk to current positioning is that the Fed Open Market Committee comes out more balanced with two rate hikes as a central case for the second half. That thinking may have been behind the less gung-ho risk appetite.”
Recent optimism that a combination of loose monetary policy and moderate global growth would bolster risk assets seems to have peaked, with the Fed meeting, followed by the ‘Brexit’ vote, as well as U.S. political conventions rife with the potential to roil markets. With equities trading around multi-month highs, investors are also speculating there is little reason to push prices higher. Billionaire investor George Sorosis said to have recently overseen a series of large, bearish investments, which has also tempered the market mood.
Stocks
The MSCI Asia Pacific Index lost 1.1 percent as of 2:07 p.m. Tokyo time, reducing its climb in the week to 0.2 percent. Japan’s Topix index fell 0.8 percent, while the Kospi index in Seoul declined 0.3 percent.
“Ahead of the Fed and BOJ next week, and the vote on Brexit the week after, no one wants to take risk today,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo, referring to the Bank of Japan meeting June 16.
Mining companies and energy producers led Australia’s S&P/ASX 200 Index down 1 percent, after the Bloomberg Commodity Index snapped a six-day advance, slipping from its highest level since October last session. The Hang Seng China Enterprises Index fell for the first time in 10 days in Hong Kong to end its longest winning streak since 2007. Markets in Mainland China and Taiwan are closed for a holiday.Futures on the S&P 500 Index slipped 0.1 percent to 2,104.20 early Friday, following a 0.2 percent retreat in the U.S. benchmark. The index — which remains about 1 percent away from its record high — clawed back declines of as much as 0.5 percent Thursday as gains in utilities and telephone companies countered losses among banks and mining shares.
“With the market being priced where it’s at, there’s not a lot of room for air,” said Jim Davis, regional investment manager at the Private Client Reserve of US Bank, which oversees $128 billion. “I would not be surprised to see it back off a little more in the next week. The market has to navigate some choppy waters between now and mid-July.”
The Philippines reports on trade and Malaysian data on factory output is scheduled, along with a foreign reserves update from Thailand.
Currencies
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose a second day, adding 0.2 percent after rallying 0.4 percent on Thursday. The gauge is headed for a second straight weekly decline, down 0.3 percent.
The yen was little changed at 107.08 per dollar. Australia’s dollar joined the Korean won and Malaysian ringgit in declines, falling 0.2 percent to trim its advance in the week to 0.6 percent. The won slid 0.8 percent, snapping a six-day climb after the Bank of Korea unexpectedly cut interest rates on Thursday. [Bloomberg]
FTSE 100 Outlook and Prediction
Despite yesterdays declines, there is a chance that we see some bullishness today, IF the 6195 area holds as support. If it does then we could well be on for a climb to 6247 where we have the daily pivot, and possibly 6277 – which is resistance on the 2hour chart, and actually looks like a very good short entry if we get there. On the 2 hour chart we have moving average resistance but also a red coral showing a downtrend. Often trading in the direction of the trend when the price touches this coral line after a colour change works well. Of course that all depends on the bulls holding the 6194/6185 area where we have the bottom of the Bianca channels. Feels a bit counter trend trade when it hits a channel but the 6323 short the other day off the 10 day worked well. So, thats the plan for today, long around the 6195 area, short at the 6277 area, possibly try a short at the daily pivot as well at 6247.