Support 6472, 6445, 6400, 6310, 6292 Resistance 6514, 6530, 6578, 6600

Good morning. I hope you had a good weekend. Most of the press was dominated by the France shooting and the march of 3 million people yesterday. Futures prices for the S&P and FTSE have stayed relatively flat over night, though Friday saw the bears take a bit of control. With the top of the 10 day Bianca at 6578, and the current price around the 6500 area, together with the Raffs pointing down on the FTSE (just) there is a slight negative Bias for me at the moment, despite that recovery last week by the bulls from Wednesday. Resistance today is initially the daily pivot at 6515 and then 6530, top of a 30min channel at 6555, then Bianca at 6578.

Asia Overnight from Bloomberg
The dollar fell for a second day after an unexpected drop in U.S. wages clouded the outlook for interest rates, and crude oil resumed declines. Billionaire Li Ka-shing’s Cheung Kong Holdings Ltd. surged in Hong Kong after a reorganization, while Shanghai shares retreated.

The greenback weakened against most major peers by 2:14 p.m. in Hong Kong as the Australian dollar added 0.5 percent and the euro gained 0.2 percent. Cheung Kong surged 15 percent, while the Shanghai Composite Index headed for its biggest three-day drop in 18 months. Standard & Poor’s 500 Index futures fluctuated. Oil slid at least 1.4 percent in New York and London. Gold advanced 0.5 percent as copper traded near the lowest since 2009. Japan’s markets are closed today.

The biggest drop in American hourly earnings since records began in 2006 is combining with sliding oil prices to damp the outlook for U.S. inflation. That’s making an early Federal Reserve interest-rate increase less likely, reducing the allure of the dollar as it trades near a 10-year high against major peers. Cheung Kong (1) offered $24 billion in stock to buy out unit Hutchison Whampoa Ltd. and will spin off its property assets.

‘Intense Volatility’
“This tug of war between deflation and expectations of the first rate hike in many years by the U.S. Fed is likely to result in intense volatility,” Nader Naeimi, who helps manage about $125 billion as head of dynamic asset allocation at AMP Capital Investors in Sydney, said in a Bloomberg TV interview.

While Federal Reserve officials agree they are unlikely to raise rates before late April, some officials are concerned inflation could remain below target, according to minutes of the central bank’s December meeting released last week. U.S. consumer prices rose 0.7 percent in December from a year earlier, the lowest rate since 2009, according to economists surveyed by Bloomberg before data due later this month.

The Bloomberg Dollar Spot Index fell a second day, losing 0.2 percent to 1,138.57. The gauge closed at 1,147.54 on Jan. 8, the highest since January 2005. The euro bought $1.1866.

Emerging Currencies
Japan’s yen strengthened 0.3 percent to 118.17 per dollar, while a gauge tracking emerging Asia currencies against the greenback climbed for a fifth day. The Aussie was worth 82.48 U.S. cents, the most since Dec. 16.

West Texas Intermediate crude dropped 1.7 percent to $47.54 a barrel today, after sinking 8.2 percent last week. Brent oil fell 1.4 percent to $49.41 per barrel. Both contracts are heading for their lowest settlement prices since April 2009. Brent lost 11 percent last week, its worst performance since the five days to Nov. 28.

Prices need to return to $100 a barrel for economic equilibrium, Venezuelan President Nicolas Maduro said in comments broadcast on state television during a tour of OPEC producers in the Middle East. Iraq set a discount for Asian customers that was the second biggest for any month since at least August 2003.

Shanghai Retreat
The MSCI Asia Pacific excluding Japan Index was little changed, with two stocks falling for each that rose.

China’s Shanghai Composite Index, the world’s best-performing major index in the past 12 months, dropped 2.8 percent amid speculation it’s advanced too far, too fast. The gauge is heading for a 5.4 percent drop through the last three days, the most for a similar period since June 2013.

“We expect the market to enter a period of fluctuation, with limited upside potential in the index in the short term,” UBS strategist Chen Li wrote in a note dated today. “The market may correct following the announcement of monetary loosening” such as a reserve-ratio cut.

Australia’s S&P/ASX 200 Index retreated 0.8 percent, while South Korea’s Kospi index lost 0.2 percent.

Copper for three month delivery on the London Metal Exchange slipped 0.3 percent after closing at $6,090 a ton on Jan. 9, the lowest level since Oct. 5, 2009. The contract hasn’t recorded a daily gain since Dec. 30 on speculation demand growth my falter amid signs of uneven economic growth in the U.S., Germany and China, the largest metals consumers.

Gold traded at $1,229.61 an ounce, the highest level since Dec. 11. Silver advanced 0.7 percent and platinum was 0.2 percent higher at $1,236.44. [from here]

FTSE Outlook

The bears took a bit of power back at the end of the week last week, hitting a low of 6472 on Friday, so that is initial support for today. With the daily pivot at 6515, and the top of the 30min channel at 6555 and Bianca at 6578 there is a slightly bearish bias from those resistance levels, as such I think there may be an initial dip today, at least until the US come online. There is a bit of support here at 6490 initially on the 10min so I think a push up to the pivot first thing before dipping back. If the bulls were to break the pivot then 6530 is fairly key – above that opens up a rise to 6555 where we have the top of a declining 30minute PRT channel. I think 6530 might be strong resistance though. Support wise, we have Fridays low at 6472, with 6445 below that and a possible trip to 6400 on the cards if that broke. The daily EMAs are still bearish, the 25ema at 6516 also acting as resistance, with the coral at 6555 – 2 separate calculations showing the same key levels in fact, so definitely watch 6515 and 6555 today.