FTSE 100 Support 6529 6525 6486 6308 6300
FTSE 100 Resistance 6585 6588 6596 6649 6755

Good morning. That was a decent short from the 6546 level yesterday, entered on that stop hunting spike up too which is always a bonus! Bears took it down to 6470 in the end before there was a bounce back though the bulls failed to break the 6555 pivot level. It does feel like we have a leg down now, probably towards 6400, though maybe lower. There is good resistance at 6649 today on the 2 hour chart – a decent shorting area if seen. There is quite a lot of risk aversion at the moment, though markets excluding the FTSE seem to be more wobbly. Gold continues its rise as a safe haven, while sterling hit the lowest for 3 decades. Its the latter that is propping up the FTSE – though how long the pound can go on being devalued remains to be seen.

US & Asia Overnight from Bloomberg

Risk aversion took hold in markets amid concern the U.K. and European economies are taking a turn for the worse. Asian equities dropped with the pound and oil, while haven demand boosted the yen, gold and sovereign bonds.

The MSCI Asia Pacific Index fell for a second day, sterling slumped to its lowest in more than three decades and crude sank toward $46 a barrel after Bank of England chief Mark Carney said risks from the U.K.’s vote to leave the European Union had started to crystallize. The yen climbed to its strongest level since June 24, when the results of the British referendum first roiled global markets. U.S. and Australian bond yields plumbed new lows as Japan’s 20-year rate hit zero for the first time. Gold rose to a two-year high.

After rallying last week on bets central banks will work to limit the fallout from the so-called Brexit, global equities are retreating again as the knock-on effects of the vote become evident. Three asset managers froze withdrawals from U.K. real-estate funds on Tuesday following a flurry of redemptions and the Bank of England relaxed capital requirements for lenders to encourage lending. A gauge of manufacturing and services in the euro area pointed to lackluster growth in June and the chance of a 2016 U.S. interest-rate hike has been all but killed off in the futures market.

“Equities still exhibit a lot of risks,” said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about $7.2 billion. “The lack of confidence and growth will weigh on sentiment. For anyone that’s reaped the benefits of the equity bull market it’s definitely time to consider taking some profits, if you haven’t already, and move to a more defensive stance.”

The Federal Reserve is scheduled to release the minutes of its June 14-15 policy meeting on Wednesday and a gauge of U.S. services output is also due. Germany has factory orders data coming, while central banks in Sweden and Poland are forecast to leave monetary policy unchanged following reviews. Financial markets in India, Indonesia, Malaysia, the Philippines and Singapore are closed for holidays.

Stocks

The MSCI Asia Pacific Index slid 1.8 percent as of 1:21 p.m. Tokyo time, after falling for the first time in a week on Monday. Japan’s Topix index tumbled 2.6 percent as yen gains dimmed prospects for exporters, while Hong Kong’s Hang Seng Index dropped 1.9 percent and South Korea’s Kospi index slid 2.2 percent. New Zealand’s S&P/NZX 50 Index fell for the first time in eight days.

There are “fears the global economy will worsen due to Europe,” said Mitsuo Shimizu, deputy general manager with Japan Asia Securities Group Ltd. “The U.K.’s economic outlook is blurred with uncertainty and the pound’s recent weakness is likely to encourage speculative buying in the yen.”

Toyota Motor Corp., the world’s largest automaker, slid as much as 3.7 percent in Tokyo and BHP Billiton Ltd., the biggest mining company, tumbled 4 percent in Sydney. China Resources Beer Holdings Co., the maker of the Snow brand of beer, sank to a two-month low in Hong Kong after saying it plans to raise HK$9.5 billion ($1.2 billion) in a share sale to help finance the purchase of a remaining stake in a Chinese venture with SABMiller Plc.

S&P 500 Index futures decreased 0.5 percent, after the U.S. benchmark dropped 0.7 percent in the last session. Contracts on the FTSE 100 Index slid 0.6 percent.

Currencies

The yen jumped 0.9 percent to 100.86 per dollar, taking its post-Brexit advance to more than 5 percent. The pound slid as much as 1.7 percent to $1.2798, its weakest level since June 1985. Julius Baer Group Ltd., which had the most accurate forecasts for major currencies in Bloomberg’s latest rankings, predicts sterling will slide to $1.16 by the end of September.

“The yen is taking the brunt of the pound selling,” said Takuya Kawabata, an analyst at Gaitame.com in Tokyo. “It’s a risk-off market triggered by the pound. We need to continue to remain wary of risk aversion prompted by the U.K.”

The currencies of Australia, New Zealand and South Africa — commodity-exporting nations — all dropped by at least 0.5 percent. The Bloomberg Dollar Spot Index added 0.1 percent, rising for a second session.

South Korea’s won led declines in Asia, sinking 1 percent versus the greenback. The yuan weakened as much as 0.24 percent to a five-year low of 6.6980 per dollar after ABN Amro Bank NV, Credit Agricole CIB and Goldman Sachs Group Inc. cut forecasts for the currency on Tuesday.

Bonds

Securities in the Bloomberg Global Developed Sovereign Bond Index, with an average life of about 10 years, yield a record-low 0.40 percent. Yields on 10-year government bonds in Australia, Japan and the U.S. sank to fresh records, with the latter falling as much as three basis points to 1.34 percent.

“In the risk-off environment produced by international events, there is a global rush to buy super-long sovereign debt, and bonds that still offer some yield are going to be most in demand,” said Hideo Suzuki, the chief manager of foreign exchange and financial products trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo.

Declining prospects of a Fed rate hike have spurred a torrent of demand for Treasuries, with almost $10 trillion of securities in the Bloomberg Global Developed Sovereign Bond Index yielding less than zero, up from about $9 trillion a week ago. In addition to experimenting with negative rates, some monetary authorities abroad are buying government debt, reducing the supply for investors who count on fixed-income assets.

Commodities

Gold climbed as much as 1.1 percent to $1,371.39 an ounce, the highest level since March 2014, and silver advanced 1.8 percent. Investment in China’s largest exchange-traded fund backed by bullion — Huaan Yifu Gold ETF — jumped to a record on Tuesday.
“Investors are pouring money into gold as there’s increasing anxiety over the global economic outlook as well as political uncertainty,” said Wu Zhili, Shenzhen-based analyst at Shenhua Futures Co. “The accommodative stance of central banks is also favorable for commodities, especially precious metals.”

Crude oil fell 0.6 percent to $46.34 a barrel in New York, after tumbling 4.9 percent on Tuesday. The price climbed as high as $51.67 last month, almost double the 12-year low of $26.05 recorded in February.

Aluminum fell 0.2 percent in London, declining with lead, tin and zinc. Rubber tumbled as much as 6 percent in Japan, the biggest intra-day loss since May 13.

“A sell-off in global stocks is boosting concerns about economic growth, leading to sales of industrial raw materials including rubber,” said Kazuhiko Saito, an analyst at Fujitomi Co., a broker in Tokyo. [Bloomberg]

FTSE 100 Outlook and Prediction

Yesterdays dip got bought up on the FTSE and we are now just above todays pivot, which is providing initial support at 6529. There is a pretty decent looking rising channel on the 10min chart with support just below this pivot but with resistance at the R1 area around 6587. As such this area is worth an initial short as I am still thinking we are in the midst of a leg down towards 6400, possibly 6300. If the bulls are stronger than that and manage to break though that level then the 6649 level on the 2 hour chart comes into play as resistance and this looks good for a short. So, similar plan to yesterday really with the rise and dip.