FTSE 100 Support 6771 6759 6752 6726 6687 6612
FTSE 100 Resistance 6795 6813 6859 6899

Good morning. Bit of a frustrating one yesterday that played out as expected but overshot all the main levels so the order trades didn’t fair too well. I am still expecting a bit of a FTSE rally, continuing the 6700 bounce from Friday, it just dipped a bit lower yesterday than expected yesterday. The 6812 resistance turned out to be stronger, as I was only expecting a modest pull back from there towards 6760, and it fell to 6730 instead. Still quite volatile as the markets work out what they should be doing. Overnight the FTSE 100 has rallied once again and still looking to target the 6860 area I feel, but there is resistance at 6795 and 6813 in the way first.

US & Asia Overnight from Bloomberg

The fallout from Donald Trump’s election to the U.S. presidency showed signs of moderating in financial markets with benchmark Treasuries and emerging-market stocks advancing for the first time in a week amid a retreat in the dollar.

The yield on U.S. government bonds due in a decade fell from this year’s high and sovereign notes in Australia halted a three-day slide. Japanese debt fell after an auction, pushing the 10-year yield to zero for the first time since September. Bloomberg’s dollar index declined for the first time since Americans voted Trump in a week ago and an MSCI gauge of emerging-market stocks rose from a four-month low. Gold pulled out of its steepest slide in more than a year, while zinc led a rally in industrial metals. Oil rebounded from an eight-week low as OPEC members sought to agree output quotas.

Trump won the Nov. 8 presidential election after pledging to cut taxes, spend more than $500 billion on infrastructure and restrict imports. His victory triggered a record selloff in global bonds last week amid speculation the proposed fiscal stimulus will fuel inflation and prompt a faster pace of interest-rate increases in the world’s largest economy. There is some skepticism that Trump’s proposals will be fully backed by Congress and technical indicators signaled many post-election moves in financial markets were excessive.

“Risks are elevated, and we are expecting further increases in volatility as markets attempt to second-guess the policies that might eventually come out from the U.S.,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “One of the challenges for markets is that all of these moves are not straightforward in terms of impact. In a lot of cases, we just have to see how things play out.”

Federal Reserve Bank of Richmond President Jeffrey Lacker said Monday that easier fiscal policy may require higher rates, but it’s too early for the central bank to react to potential policy changes by the incoming administration of president-elect Donald Trump.

Bonds

Ten-year U.S. Treasuries rose, pushing their yield down by four basis points to 2.22 percent as of 2:23 p.m. Tokyo time. The 41 basis point jump over the last three trading sessions marked the steepest climb in more than seven years and the 14-day relative strength index for the securities indicated they were the most oversold since 1990.

Ford O’Neil, who oversees about $100 billion in bonds for Fidelity Investments, said the sharp run-up in yields following the election may not be justified given that Trump will face resistance from Congress in getting his fiscal stimulus plans approved.

Japan’s 10-year bond yield increased to zero, having been negative for almost eight weeks. A gauge of demand weakened at a sale of five-year securities on Tuesday.

The yield on Australian debt due in a decade was little changed at 2.66 percent, the highest it’s been since April. The Reserve Bank of Australia said in minutes of its Nov. 1 meeting that the risks to the global inflation outlook “were more balanced than they had been for some time.” That follows a rebound in commodity prices and faster forecast growth in major advanced economies.

Currencies

Bloomberg’s Dollar Spot Index, which tracks the greenback against 10 major peers, retreated 0.1 percent from a nine-month high. It jumped 3.2 percent over the last four trading sessions, the steepest rally since January 2009, amid speculation Trump’s proposed policies will fuel economic growth and hasten interest-rate increases by the Fed. Futures indicate a 92 percent chance that borrowing costs will be raised at the central bank’s December policy meeting.

The yen rose 0.3 percent to 108.11 per dollar. It slipped to a five-month low of 108.54 on Monday, having climbed as high as 101.20 as the U.S. election results came out on Nov. 9.

“The dollar’s surge from around 101 to 108, just in a few business days, is like going over the speed limit, so a bit of a correction is natural,” said Takuya Kanda, a senior researcher at Gaitame.com Research Institute Ltd. “The dollar is currently rallying on expectations only. But the policies Trump has called for are all dollar-positive. After pausing around 107 to 108, the dollar will resume its uptrend toward 110 yen by year-end.”

South Africa’s rand strengthened 1 percent, leading gains among emerging-market currencies. China’s yuan sank as much as 0.3 percent to its weakest level since 2008, while India’s rupee dropped 0.7 percent as trading resumed following a holiday on Monday.

Stocks

The MSCI Emerging Markets Index added 0.2 percent, after sliding 7 percent in the last four sessions. The Shanghai Composite Index held near a 10-month high and Hong Kong’s Hang Seng Index rose 0.5 percent from its lowest close in three months.

Japan’s Topix index fluctuated near its highest close since April. A gauge of banking stocks jumped 1.8 percent, the best performance among 33 industry groups, following better-than-expected earnings from the nation’s three biggest lenders. Mitsubishi UFJ Financial Group Inc., the largest, rallied 3.9 percent.

Futures on the S&P 500 Index advanced 0.2 percent after the underlying benchmark lost less than 0.1 percent on Monday. Some of the world’s biggest technology companies including Apple Inc. and Microsoft Corp. dragged the Nasdaq Composite Index down 1.1 percent last session amid concern over what Trump has said about international trade.

Commodities

Crude oil rose as much as 2.2 percent to $44.26 a barrel in New York, after sliding 4.3 percent over the last three sessions. Hedge fund manager Pierre Andurand said he sees a 70 percent chance that members of the Organization of Petroleum Exporting Countries will agree output limits at a Nov. 30 meeting and prompt a sharp rally in oil prices, despite disputes among its members.

“History has demonstrated that OPEC typically never reaches an agreement before the headlines,” wrote Andurand, who won big by predicting the oil market’s downturn in 2014. “Unfortunately, the noise surrounding negotiations is often misinterpreted by the media and most analysts who perceive bargaining techniques as a sign of a deal falling apart.”

Zinc rallied 1.1 percent to its highest since January 2010 in London, while copper rose toward its highest level in more than a year. Traders should be more optimistic about the ability of China’s ongoing infrastructure spending to underpin metals demand and sustain price rallies, according to Robin Bhar, an analyst at Societe Generale SA. The Asian nation accounts for about half of global consumption, the bank estimates.Gold added 0.3 percent, rebounding from a five-month low. It slid 4.4 percent over the last three days as the dollar strengthened. [Bloomberg]

FTSE 100 Outlook and Prediction

For today I am still expecting this climb to the 6860 area, I thought it was going to start yesterday from the 6760 level but we dipped a bit further. There are a couple of resistance levels on the 2 hour chart that the bulls will need to break, namely 6795 which is the 100 Hull moving average, then 6813 which is the coral line (red for a downtrend at the moment). If the bulls manage to push above the 6813 then we should be on for a rise to the top of the Bianca 20 day channel at 6859. The 10 day channel top is at 6899 but I don’t think we will get that high today, but never say never! If we do then a short at 6899 is also worth a go.

Support wise we have the pivot at 6771 and S1 around yesterdays low area at 6726. We have had a fairly decent rise overnight so the bulls will be keen to keep that going