Markets were very favourable to clients yesterday with supports holding very nicely pretty much across the board.

The FTSE was even kind enough to manage two bites at the cheery yesterday falling to the 5180/5200 support twice and rebounding up to 5260 on both occasions. Announcements of minutes from the Fed at 19.15 last night at first confused matters giving the impression that there was appetite for higher rates in the near term before more measured analysis indicated that this was merely the opinion of the established hawks on the committee. The Dow managed a 150 point range over the next period as markets first fell dramatically and then rebounded just as fiercely.

The last five sessions in the indices for the FTSE, Dax, Dow, S&P etc have been particularly dour with neither the bulls nor the bears able to push matters to a conclusion. The inability of the markets to pressure the supports to any great extent (albeit that we do keep returning to them) coupled with the little niggle that Obama’s little outburst last week will be quietly watered down into non-existence does leave one hope that a return to the bull trend is not unreasonable but over everything we have the prospect of politically inspired spite doing real damage to the markets.

The Euro continues to suffer versus the pound and we are now up at 1.1585 on the cross the high since last August and rather one in the eye of those forecasting parity any time soon. This said there is major resistance pretty much exactly where we are right now at 1.1590/1.1600 but above here the bulls will be looking for 1.1680 and then 1.1825 and 1.1900 reflecting the highs of 2009. On the way down there is minor support at 1.1555 and 1.1520 and a short term hourly rising trend at 1.1510.

Sterling seems stuck a bit versus the dollar oscillating down to the low 1.61’s and then rebounding up to the high 1.62’s. At the moment we are approaching the high side of this equation at 1.6275 and we are seeing some selling from our clients. For the bulls the range above 1.63 to 1.6450 is quite congested and may prove difficult to overcome but the same could be said for the bears as pressure below 1.60 invariably comes to nothing in the end. Let’s face it. Cable is well and truly stuck between 1.61 and 1.67 with the occasional abortive attempt in either direction.

Oil has amanged to claw its way back above 74 buck this morning and dealers will not be unhappy as the bulls were looking a tad green around the gills when we spiked down to the mid 72’s yesterday evening. The is volume resistance in the high 74 dollar area up to $75 which may prove difficult to overcome in the short term but if the Asset markets continue to hold firm then there is every chance of a more concerted attempt higher. Unfortunately we come against the fact that inventories are still strong and with growth in the west still on the anaemic side pressure on supply seems very far away just now.

Gold is still just hanging on above the major supports mentioned ad nauseam over the last few weeks/months. We had a shot at breaking then yesterday but failed to hold on and we are now back above the long term rising trend support line. For longs the failure to follow lower will be encouraging and for the bears the mere fact that an attempt was made will also be pleasing. At the moment the ‘buys’ have it as the support did indeed hold and so clients are getting longer in the high 1080’s and low 1090’s. Caution should be very high here at the moment a gold seems to have been contracting trading ranges day by day and a break out may well be imminent.