Trade Alerts – Support 6991, 6975, 6966, 6940, 6896, 6845 Resistance 7037, 7044, 7072

Good morning. That was a decent long from 6975 yesterday, helped by he ECB deciding to front load their QE during May and June (heading something off maybe? If so than July could see a drop on equities), however it stalled at 7010 not managing to reach the 7028 shorting area. Greece rumbled away in the background with Germany worried that any concession to Greece will set off political contagion and cause fiscal discipline to collapse across southern Europe. The UK has tipped into deflation – with overall prices for goods and services falling – for first time since records began. Prices, as measured by the consumer prices index (CPI), fell by 0.1pc in the year to April, following zero inflation in February and March.

US & Asia Overnight from Bloomberg
Asian stocks rose, with a weaker yen boosting Japanese shares, after data showing U.S. housing starts surged to a seven-year high strengthened the case for an interest-rate increase this year.

The MSCI Asia Pacific Index gained 0.2 percent to 153.41 as of 9:01 a.m. in Tokyo. The Topix index advanced 0.7 percent as the dollar traded at 120.66 yen. Japan’s economy expanded an annualized 2.4 percent in the first quarter from three months earlier, beating economists’ forecasts for a 1.6 percent increase, a report showed before markets opened Wednesday.

New residential construction in the U.S. surged in April to the highest level since November 2007, according to data released Tuesday, while more permits, a proxy for future construction, were issued than at any time since June 2008. Investors are examining this data ahead of the release of minutes Wednesday from the Federal Reserve’s April meeting for clues as to the timing of the first interest-rate rise.

“The much better than expected U.S. housing data shortened the odds on a 2015 increase in the Fed funds rate,” said Tony Farnham, an analyst at Patersons Securities Ltd. in Sydney. “These stats certainly lent aid and comfort to our belief that the GDP growth drag provided by adverse weather conditions regularly hitting large slabs of the U.S. over the first quarter would prove to be temporary.”

South Korea’s Kospi index climbed 0.3 percent. Australia’s S&P/ASX 200 Index retreated 0.1 percent and New Zealand’s NZX 50 Index slipped 0.3 percent. Futures on Hong Kong’s Hang Seng Index lost 0.1 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city were little changed in most recent trading.

E-mini futures on the Standard & Poor’s 500 Index were little changed. [Ref]

FTSE Outlook

Todays pivot is 6991, pretty much on that as I write this so we have initial support here. Bulls will be keen to break above yesterdays high at 7010 which would open the way for a trip to the top of the 20 day Bianca at 7037, where we also have (at 7033) the daily T3 coral line for resistance too. Above this we have 7072 for the top of the 10 day Bianca and 10 day Raff at 7062. So a few bigger picture resistance levels coming into view. The S&P managed to get as far as 2136 yesterday, falling a bit short of the 2140 area, though R2 today is still there at 2141. Despite yesterdays rise off the back of that ECB news, the bulls failed to push on above 7000 and maintain a hold above it, not very bullish! For today i have support below the pivot at 6975, and resistance at 7035 – these are the 2 main areas I am watching today. Lower support is 6966, 6940, with 6896 if it gets more bearish. However, I am slightly bullish still as the price is holding above the 25ema on the daily chart. It feels like the market is waiting for something, probably clarity on the Greece situation.