Manoeuvrings within trading ranges appears to be the modus operandum at the moment.
The banking and mining sectors continue to bolster the FTSE but with the domestic weather situation likely to damage revenues, on top of the warnings for prospects later in 2010, has meant that the retail sector (outside supermarkets) is struggling to maintain the highs of the year end.
The FTSE hit 5550 this morning in pre-market action and is still pretty much at the highs at the moment at 5530. Trading ranges for the senior UK index have been very constrained since day one 2010 with just 70 points covering the four sessions since then. It is easy to speculate on the same thing happening today (especially with many minds concentrating on the weather). Resistance is at 5545/5550 and then above here at 5575 and 5650, support is at 5500 (naturally) and 5475 with more major support at 5340.
While the FTSE continues to pressure the highs the Dow, Dax and S&P seem to have also run into treacle with just 100 points covering the Dow in the same 4 day period and likewise for the Dax and S&P. All the indices seem to be struggling to make new highs stick and dealers are watching to play the ranges but also to keep a keen eye out for a break higher. If one of the major indices goes for it then the others are in a prime position to follow suit.
Currency markets are once again taking it in turns to be weak and strong. Sterling is picking up the ‘Mr Muscles’ award today with the failure of the Cable (GBP/USD) cross rate to break below 1.5900 in yesterday’s action bringing out the buyers in reaction. We have now bounced back up to 1.6025 this morning (much to the relief of our clients who were strong buyers yesterday at the lows). Support is obviously 1.5900 and resistance remains at 1.6035 to 1.6070 and then 1.6120 where it has been for some time.
The Euro is also looking to hold the 1.4300 support and we have been down here between 1.4300 and 1.4340 since the move lower yesterday morning.
Oil finally put in a negative day yesterday and dealers have been taking profits through this morning’s session. We have not challenged the support yet so the momentum remains to the up side. 83.50 looks to be building as a barrier to a move higher but the omens do not look good for cheaper fuel just now. Once the weather turns and inventories are rebuilt again we can probably look forward to a reaction sell off but this might well be a while before we see it.
The Yellow Metal has retreated from the highs and spent almost all of yesterdays session sitting on the 1128 dollar support before breaking lower in the very early hours this morning. We have already been down to support at 1120 but this proved too much to overcome outside of US trading times. The support goes all the way down to $1115 but if it breaks there is not much to stop us until $1101. On the upside there are barriers at 1127/1128, 1135 and the previously mentioned major resistance at 1141.