Back from the brink just about sums up everything about yesterday both from a market perspective and from a Budget one.

It looks like the markets are in the mood to give the Chancellor the benefit of the doubt although it is a mystery as to why. Once again he has dodged all the difficult choices and indeed has (almost) promised small pay rises for the ‘key’ sectors of ‘New Labours’ flagship public sector project. Small comfort for the private sector which has, so far, had to bear the whole brunt of the recession both in job losses, pay freezes, cuts and short time working. The Public sector seems to exert some kind of mystic hold over socialist thinking in that a job working for the government is somehow of more worth than one merely grubbing around in the darkness outside.

The markets all had a series of looks at support levels throughout the session yesterday before deciding that the current trading ranges were ok after all. We spent much of last week looking at the top of the range and this week seems to be turn of the bottom. This follows the series of market activity in place for the last month or so.

Dealers will be watching the supports in the FTSE at around 5165/80 for any breach and (while the supports did all hold yesterday) it must be mentioned that from a technical point of view there is quite a bit riding on the markets staying above 5165. Volume, price and trend support is all critical at this level and a breach may well see a quick bail-out from some of the shorter term buyers.

The Dow and S&P are still within striking distance of 10400 and 1100 which is where we seemed to have been oscillating around for some time now. But punters (having been keen to pick up long bets on weakness in the past) now seem to be slightly more wary. The economic numbers coming out of the US would indicate that the economy over there is on the mend (and indeed the UK is desperate for this to become a reality) but it must be pointed out that we have built quite a bit into the market on this expectation and if the US starts to tighten, not on the cards just yet but certainly a possibility, then the attraction of equities might well start to wane.

On the currency front the Euro held at the 1.4680 support level (mentioned ad nauseam) yet again yesterday although the bounces do seem to be getting weaker and weaker. Not just from here but from previous supports as well. For very long term traders it has to be admitted that any sale of Euro above 1.40 is probably going to eventually pay dividends. Many of the attractions for the Euro have nothing whatsoever to do with the performance of the Euro Bloc economies and these attractions will, naturally, wax and wane of the long term. At the moment the currency is in the ascendancy but these things turn.

As mentioned support is at 1.4680 resistance is at 1.4760/80 and then 1.4800.

Gold rather pleased me yesterday in managing to rally to exactly our resistance level at 1145-1150 before slumping back down again. The Yellow metal is displaying some unnerving weakness at the moment, making heavy weather of any rallies whilst shifting into reverse with alarming rapidity. Of course the bull momentum is still the overall motor to the market but we are just starting to hear a few misfires. Support is at 1120/25 which the market might find it difficult to break this morning but if this goes then we might well have a quick look at 1100 (just to see how strong the support is). As everyone knows there are some truly monumental longs in ‘hedge fund land’ out there and if these start to get twitchy things could get a tad messy.

Oil tried for some support yesterday but ended the day well down even flirting with 70 bucks at one point. We have bounced from here up to $71 but it has to be admitted that the black stuff remains weak. The ‘Old’ June to October range of 65 to 75 dollars now seems likely to become the ‘New’ range for the end of the year as well.