Support 6770, 6755, 6735, 6714 Resistance 6815, 6850, 6880, 6946

Good morning. Well the trade plan worked out great yesterday with some good moves in the end and decent tally of points, I hope you were able to gain some too. I expect we will have a bit more bull today, then a down day tomorrow. Just a hunch! Anyway, the bottom of the Bianca channels at 6730is held well yesterday for both the initial climb and then a further bounce on the afternoon test. The bottom of the 20 day is still around 6735, while the 10 day is 6714 – so the rise is still weak at the moment. Bulls will need to break the overnight high at 6815, to start thinking about 6850+. Am already bored of the war of words that make up the election battle ground. Usual tit for tat rhetoric starting already on that front. Meanwhile the Chancellor urges Greece and the rest of the 19-nation eurozone bloc to act “responsibly” as the newly elected goverment seeks to renegotiate its €240bn (£180bn) bailout agreement.

Asia Overnight from Bloomberg
(Bloomberg) — Australia’s dollar plunged to a more-than five-year low as the central bank cut interest rates, while Japanese government bond yields jumped after the weakest note auction in 19 months. Energy shares advanced as U.S. oil headed for its biggest four-day rally since 2012.

The Aussie weakened 1.8 percent to 76.64 U.S. cents by 3:11 p.m. in Tokyo and local bonds surged as the Reserve Bank of Australia reduced its target cash rate to 2.25 percent. The rate on Japan’s 10-year notes added 7 1/2 basis points. West Texas Intermediate crude increased 0.7 percent to $49.90 a barrel, sending the MSCI Asia Pacific Energy Index up 2.5 percent. Standard & Poor’s 500 Index futures dropped 0.4 percent.

The RBA joined a global wave of monetary easing, citing lower commodity prices and an overvalued local currency exerting downward pressure on the Australian economy. India held rates steady today after a surprise reduction last month. Oil is rallying on speculation that crude’s collapse to an almost six-year low will prompt producers to scale back output and reduce a glut.

“The global monetary policy changes over the past month have raised the degree of difficulty in getting the Aussie dollar down,” said James McIntyre, head of economic research in Sydney at Macquarie Bank Ltd., who picked today’s move. “The RBA has reached the conclusion that it’s going to have to step up and give the currency a push to get the weakness desired. We think there’s at least one more cut to come.”

Australia’s currency hit its lowest level since May 2009 as the RBA said it remains “above most estimates of its fundamental value.” The yield on the country’s 10-year bond dropped 17 basis points to 2.27 percent, a record low.

BHP Climbs
The S&P/ASX 200 Index rose 1.5 percent in Sydney, extending gains after the RBA decision and heading toward its longest run of increases in 18 months. A subindex of Australian energy shares surged 4.1 percent as Beach Energy ltd. and Senex Energy Ltd. jumped at least 14 percent. BHP Billiton Ltd., Australia’s largest oil producer, climbed 3.6 percent and is heading for its highest close since Dec. 4.

Australia is a developed-world rarity in that almost 24 years of growth leave it with rate ammunition, while policy makers from Tokyo to Frankfurt undertake quantitative easing to reflate their economies.

“The RBA turning dovish means receding superiority for the BOJ,” said Junichi Ishikawa, market analyst at IG Markets Securities Ltd. in Tokyo. “The BOJ’s losing its superiority as central banks from other developed countries have made their dovish stance very clear.”

Bond Auction
Japan’s yen traded at 116.96 per U.S. dollar while the Aussie bought 89.589 yen, the least in a year. Japan’s 10-year debt slid, pushing yields eight basis points higher to 0.365 percent after demand at an auction of the bonds slumped.

The Ministry of Finance sold 2.191 trillion yen of 10-year securities at an average yield of 0.313 percent. The bid/cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, was lower at 2.68, the lowest since July 2013.

Japan’s Topix index slipped 1.1 percent, led by exporters Toyota Motor Corp. and Honda Motor Co.

WTI settled at a one-month high on Monday. It hit its lowest price since March 2009 on Jan. 28. The U.S. benchmark contract rallied 8.3 percent on Friday, the biggest one-day gain since June 2012, as data showed drillers pulled 94 rigs from U.S. fields last week, the most on record.

U.S. Strike
The fuel is up almost 13 percent since Jan. 28, that’s the biggest four-day gain on a closing-price basis since July 2012. Brent crude added 0.9 percent to $55.23 a barrel in London.

Gasoline rose a fourth day after closing at its highest level in more than five weeks on Monday. A strike by the United Steelworkers union, which represents employees at more than 200 refineries, terminals, pipelines and chemical plants in the U.S., started Sunday at nine sites and resulted in one plant shutdown while management takes control of operations at six others.

Hong Kong’s Hang Seng Index swung to a 0.2 percent with a gauge of Chinese companies advancing 0.6 percent. The Shanghai Composite Index rose 1.6 percent, snapping a five-day, 7.5 percent rout.

Lenovo Group Ltd. surged 5.3 percent in Hong Kong after posting profit that beat analysts’ estimates as its Motorola Mobility acquisition helped capture a larger share of the global smartphone market.

A gauge that tracks emerging-market currencies against the dollar was higher for a second day. The South Korean won climbed 0.5 percent, tracking gains by the yen. Higher oil prices contributed to a 0.6 percent advance by Malaysia’s ringgit, which yesterday recorded its weakest close since April 2009. [Ref]

FTSE Outlook
I expect we will get some bull today, especially after that strength yesterday. Tomorrow might be a different story though! We have held the pivot area overnight at 6770 so thats the base line for today for an initial push to 6815 (hit overnight and dropped back, so the bulls will need to break this to get things moving and to push to 6850+). I have plotted the arrows based on this pivot area holding, both first thing (we have already climbed off it while I have been putting the email together) and also if tested later on. If we drop below the pivot then the 6755 is the next support with the bottom of the 20 day Bianca below that at 6735 – I don’t think we will get this low but worth a long there again if so, though the 10 day has moved down a bit with support at 6714.

On the bullish side, above 6815, we have 6850, then 6875 as the levels to watch – the 6875 area being the top of the 10 day Raff so might be worth a small short here if seen.