FTSE Trade Alerts | Support 6945, 6925, 6913, 6893, 6885 Resistance 6983, 7000, 7007, 7089

Good morning. Well that was a bit of a weird one yesterday with no really clear signals and actually a bit choppy on the FTSE. I didn’t think that the short form the pivot would take but it did right at the bell so was able to regain some points from that, though interestingly the FTSE held up pretty well during the evening whilst the Dax and US indices fell loads. The S&P quite quickly dropped 20! The Dax is closed today so it was probably profit taking and closing of position ahead of the weekend, as well as a bit of the Greek situation continuing, with them hoping for a bailout deal over the weekend. The FTSE is closed on Monday for the Bank Holiday. We have had a bullish Friday on the ASX so if the pattern still continues, we should be bullish on the FTSE today.

US & Asia Overnight from Bloomberg
Japanese stocks headed for their worst weekly drop this year after the central bank governor ruled out further monetary-policy easing for now. The dollar climbed after its biggest monthly drop in 3 1/2 years, and U.S. equity-index futures advanced.

The Topix fell a second day, losing 1 percent by 12:53 p.m. in Tokyo following a fourth straight monthly gain. Markets from China to South Korea are closed Friday. U.S. futures rose 0.2 percent after a stock selloff in New York. The Bloomberg Dollar Spot Index added 0.2 percent after slumping 3 percent in April. The yen fell as 10-year Japanese bond yields traded below similar German rates for the first time since March 6.

Bank of Japan chief Haruhiko Kuroda made his comments Thursday after markets closed, adding that a two-year timeframe for reaching 2 percent inflation won’t be reached. A bigger-than-estimated drop in U.S. jobless claims added to a mixed run of data that’s muddying the outlook for Federal Reserve interest-rate increases. European bonds tumbled this week as prices stagnated in April from a year earlier, signaling that European Central Bank asset purchases may already be having an effect.

“There was concern about the recent strength in stock prices,” said Akio Yoshino, chief economist in Tokyo at Amundi Japan Ltd. Which oversees about 3.74 trillion yen ($31.28 billion). “A lot of investors had hopes for additional easing from the BOJ. Investors are using things like the U.S. GDP as a good excuse to sell, but I think that’s an after thought.”

May Day
Markets in Singapore, Hong Kong, China, India, Indonesia, Malaysia, Philippines, Thailand, South Korea, Taiwan, Sri Lanka, Vietnam and Pakistan are all closed Friday.

The Topix is heading for a 2.6 percent drop this week. The BOJ’s key gauge of price growth eked out a small gain in March, data released Friday showed. The yen slid 0.3 percent to 119.68. The country’s 10-year notes paid 0.345 percent versus the 0.366 offered by similar-maturity bunds.

The rate on Germany’s benchmark notes has surged from as low as 0.049 basis points on April 17 as sovereign bonds across the region tumbled. Investors revolting against negative yields in Europe are set to wipe a record 142 billion euros ($160 billion) off the value of the region’s government notes this week.

Soaring yields helped propel the euro to as strong as $1.1266 Thursday. The joint currency bought $1.1210 Friday and is set for a fifth straight advance against the yen, the longest streak since November.

Policy Divergence
Banks from ING Groep NV to Citigroup Inc. say they’re sticking with their forecasts for the euro to resume its unprecedented slide because the fundamental driver — a split in policy between Europe and the U.S. — remains intact.

“The shift-up in yields has helped shift the euro higher,” said Kit Juckes, a strategist at Societe Generale SA in London. “If it went on, it would explain it happening more. But the European bond market looks more like a case of position capitulation, correction and money coming off the table than a turn in trend.”

The greenback was stronger against most peers Friday, climbing 0.2 percent versus the Australian dollar and Swiss Franc, and heading for a 0.4 percent advance against the New Zealand dollar.

In the U.S. Thursday, a selloff in technology and small-cap shares sent the Russell 2000 Index toward its worst week since October and pared a monthly gain for the S&P 500. Apple Inc. lost 2.7 percent after reports it found a defect in its new watch. Yelp Inc. plunged 23 percent as its earnings and outlook disappointed investors, and Google Inc. fell 2.3 percent.

China PMI
The S&P 500 declined 1 percent to 2,085.51, below the index’s average price for the past 50 days. The Russell 2000 Index slumped 2.2 percent, its biggest drop in more than a month. The Dow Jones Industrial Average fell 195.01 points, or 1.1 percent, to 17,840.52, and the Nasdaq Composite Index lost 1.6 percent.

China’s official manufacturing gauge held at 50.1 in April, just above the borderline between expansion and contraction, amid government efforts to bolster growth in Asia’s largest economy.

Gold held the biggest loss in almost eight weeks after a report showed that applications for U.S. jobless benefits declined last week to the lowest in 15 years, boosting bets the Federal Reserve may raise interest rates sooner.

Copper, Nickel
Bullion for immediate delivery traded at $1,183.23 an ounce from $1,184.37 on Thursday, according to Bloomberg generic pricing. The metal is still poised to advance 0.4 percent this week.

Copper in London slid 0.3 percent, retreating from a 3.1 percent gain on Thursday and trimming the biggest weekly advance since Sept. 2012.

Nickel was little changed after closing 4 percent higher as negotiations failed to end a strike at the world’s second-largest ferro-nickel mine in Colombia. The metal is headed for an 11 percent gain over the last two weeks.

Wheat slipped 0.3 percent after dropping on Thursday to cap a 7.4 percent slide in April, the second monthly decline. Prices fell 2 percent on Thursday after U.S. exporters reported record net cancellations from overseas buyers in the week ended April 23. [Ref]

FTSE Outlook and Forecast

Considering the weakness int he Dax and S&P last night the FTSE held up very well, only dipping 50 or so from the pivot area (should have held that short longer after all!). As such, and with a bullish ASX200 on Friday we could be on for a bullish day. As such a long off the pivot at 6945 might be worth an early bounce, though there is fairly strong support at 6925 where we have the 20 day Bianca channel and also some horizontal PRT support. There is a fairly decent looking channel on the 30min with support lower down at 6895 and resistance at 6985. For today I am expecting a rise to 6985, possibly even 7000, where we have the EMAs on the daily, before more downside. The S&P still looks weak so I wouldn’t be surprised if we see more downside on that too. So cautiously long today!

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