Support 6519, 6495, 6420 Resistance 6546, 6555, 6585, 6611, 6625, 6650

Good morning. Well, here we are, the first ‘proper’ day of 2015 trading. And its all kicking off again already with Greece and Euro worries, together with a strengthening dollar (possibly heading to 1.45 on the GBPUSD). I expect we will be seeing another ECB “do whatever it takes” speech before too long, and probably some QE action as well. I can’t imagine Greece will e bailed out again in any meaningful way, and the Germans are more accepting of a Greek exit from the Eurozone now. Oil continues to fall as well, now around $51 a barrel. We will also have the supermarkets revealing Christmas period sales soon, likely to be pretty telling for the “real” health of the UK economy.

Asia Overnight from Bloomberg
The euro weakened to an almost nine-year low and Asian stocks fell amid concern Greece will exit the European currency union. Oil slumped to its lowest level since 2009, while silver and Chinese shares climbed.

The euro depreciated 0.5 percent to $1.1939 at 2:05 p.m. in Tokyo, after touching its weakest level since March 2006. The dollar gained against all but one of its 16 major peers. The MSCI Asia Pacific Index (MXAP) declined 0.5 percent and Standard & Poor’s 500 Index futures added 0.1 percent. The Shanghai Composite Index jumped to its highest level in five years. The yield on Japan five-year bonds fell to a record. Crude retreated 1.7 percent and silver jumped 1.3 percent.

Greece’s political parties have embarked on a campaign for elections this month that may determine the fate of the country’s membership in the euro currency area, with Der Spiegel magazine reporting German Chancellor Angela Merkel is ready to accept a Greek exit. Data this week will probably show consumer prices in Europe fell for the first time in five years in December, adding to the argument for European Central Bank president Mario Draghi to extend stimulus.

“The reasons to be selling the euro were pretty clear over the weekend: Draghi being a step closer to QE and deepening concerns about the Greek political situation,” Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney, said by phone. “The euro was so close to such a keenly watched round number as $1.20 that we didn’t need any fresh news to tip us over the cliff.”

Dollar Strength
The euro reached a low of $1.1864 today, extending its loss over the past year to 12 percent as euro-region and U.S. monetary policy diverged. While the Federal Reserve has wound back its own bond-buying program and floated the prospect of raising interest rates from near zero, the ECB reduced rates and started asset purchases in a bid to stoke economic growth.

Draghi said in an interview with German newspaper Handelsblatt published last week that while deflation risks are “limited,” policy makers “have to act against such risk.” Asked how much the ECB might spend on government bonds, he answered that it’s “difficult to say.”

The pound dropped to its weakest level since August 2013 the Swiss franc lost 0.5 percent, and the New Zealand dollar declined 0.8 percent. The Indonesian rupiah weakened 1 percent. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, added 0.3 percent, heading for its highest close since March 2009.

The yield on five-year Japanese bonds dropped to a record 0.025 percent. Markit Economics and JMMA release their final reading on the Japan manufacturing purchasing managers’ index for December today.

Shanghai Rally
Consumer staples and telecom stocks led declines on MSCI’s Asian Pacific index, while energy shares gained. The Kospi lost 0.4 percent in Seoul and Taiwan’s Taiex Index retreated 0.6 percent. Japan’s Topix was little changed. The Shanghai Composite Index climbed 2.7 percent, extending its rally over the past six months to 61 percent. Hong Kong’s Hang Seng Index added 0.5 percent.

West Texas Intermediate crude slipped to $51.77 a barrel after capping a sixth straight weekly loss Jan. 2. Brent crude traded in London fell 1.5 percent to $55.58 per barrel, with both blends headed for their lowest settlement levels since 2009.

WTI and Brent tumbled more than 40 percent last year as the highest U.S. oil output in about 30 years collided with slowing global demand and OPEC’s reluctance to reduce its own production. Iraq plans to boost crude exports this month, according to the oil ministry in the second-largest producer of the Organization of Petroleum Exporting Countries.

Silver advanced to $15.9630 an ounce in the spot market, while tin climbed 1.8 percent. [from here]

FTSE Outlook

Will it be a case of making hay while the sun shines before the Greece situation really kicks off and we get a rise to test the 6610 level? Above this then a move to 6625 and 6650 looks possible, though there are more resistance levels being flagged up than support at the moment, The daily pivot is 6555 and I feel we will get an early test of that to start things off today. The 30 minute chart EMAs are brewing for a cross, though the daily have crossed to bearish with that weak end to 2014, flagging resistance on that at 6546. The top of the 10 day raff is at 6586, so the bulls have a bit of work cut out this morning if they are going to reach 6610 – maybe a fast spike up to break through those levels without much of a pause?