Good morning. Nice long trade yesterday off the 6793 level, which, thanks to a rumour that Greece had reached an agreement, in principle, with the European Union to stay in an EU bailout program, saw it run to the target of 6850. I closed it at 6811 after collecting the 12 point divi as it could pretty much go anywhere at the moment, so happy to bank a few points. It looks like “they” are certainly keeping the FTSE below the 6855 level, as there has been any number of shorts off that level this week. A break of that will likely see a retest of 6900 and 6922 – think its safe to assume it would need positive EU/Greek news for that.
US & Asia Overnight from Bloomberg
(Bloomberg) — The euro retreated after European lawmakers failed to reach an agreement on how to keep bailout funds flowing to Greece. Asian stocks rose as Japan resumed trading after a holiday, while U.S. crude oil held below $50 a barrel.
The 19-nation euro lost 0.2 percent to $1.1313 by 9:09 a.m. in Tokyo, after rallying into the Wednesday close. The MSCI Asia Pacific Index climbed 0.6 percent as Japan’s Topix index jumped 1.5 percent from Tuesday levels. Standard & Poor’s 500 Index futures added 0.1 percent after earlier rising as much as 0.3 percent. Oil in New York climbed 1 percent to $49.32 after sinking more than 7 percent the past two days. Gold rose 0.2 percent after touching a five-week low. Korea’s won sank.
Talks in Brussels Wednesday covered a lot of ground, though no joint conclusion was reached, Eurogroup Chairman and Dutch finance minister Jeroen Dijsselbloem told reporters. Earlier, four euro-region officials said they were moving toward an agreement on a bailout extension, claims then repudiated by Greece, which has said it won’t accept extending the existing bailout program. Japan posted a bigger-than-forecast increase in machinery orders Thursday, with Australia to report on jobs.
“It’s so loaded on a Greek resolution at the moment,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., said by phone before Dijsselbloem’s comments. “Everyone is waiting to see whether the high line stance from Germany and Greece waivers, and who waivers the most.”
The discussions between euro-area lawmakers and Greece are slated to resume next week. [ref]
FTSE Outlook
Today’s pivot is 6816 and after the drop back off 6850 on that Greek rumour, its initial resistance today. Above this level sees the 6855 level yet again as the line in the sand, and if the bulls can manage to break that then a visit to 6870, and then the top of the 10 day Bianca at 6922 looks probably. Its admittedly a bit of a casino as it could do anything while Greece calls the shots (and bluff) of the EU – who will blink first? If Greece leave does the house of cards collapse, or will the strongest survive as the weakest are cast aside? Does the EU bow to the demands, inevitability to be shortly to be called up by Spain and Italy for a renewed deal? One can speculate till the cows come home!
Anyway, support is 6786 today where we have the bottom of the 10 day Bianca, with the 20 day not far below that at 6772. A break of this won’t be good for the bulls though as 6745 then looks probable. I’d be inclined to try a long at 6772 if seen.