Asian markets were fairly downbeat overnight after Wall Street slipped to slight losses overnight amid a disappointing day for corporate earnings, with the Nikkei not helped by a slight downward drift in the chart of Dollar/Yen. Investors seem to be settling down for the three day weekend in the US with Martin Luther King day on Monday. Despite this, eyes will already be training towards the announcement of Chinese growth on Monday which could see a further slowdown from the 7.6% seen in Q3. However there is key data to get through today which could be an impact for traders. The housing data from the US at 13:30GMT includes the building permits and housing starts, both of which are key for the outlook of the housing market in the States. This is followed by the key University of Michigan Confidence number at 14:55GMT, which is expected to show further improvement to 83.5.
The FTSE 100 now seems to be trying to set up camp above the 6800 level. The break that was seen on Wednesday has been held for the last couple of days, with the immediate support from the breakout coming at 6768. Technical studies remain in positive configuration. The hourly chart is showing slight signs of fatigue in the very near term, but this could only serve up another chance to buy at a lower level. The support band around 6768 would be ideal.
Having settled in Asian trading overnight, the Dollar seems to be gaining the upper hand once more and with data for US housing and consumer sentiment this afternoon (two factors that have shown a continued trend of recovery in recent months) this dollar strength cold be a theme of today. The daily chart continues to just cling on to the multiple supports around $1.3600 (uptrend since July and the 21 day moving average) however, the hourly chart suggests the intraday support at $1.3580 looks set to come under pressure. The upside resistance formed overnight comes in at $1.3623 and any move back into the overnight trading band above $1.3610 should probably be seen as a chance to sell.
The intraday technicals on cable have been blown out of the water following the huge beat of expectations in the UK Retails Sales data out at 09:30GMT. This has seen the rate spike sharply higher through many resistance levels in place. The next viable intraday resistance comes in at $1.6463 which was the high from 14th January. Moving therefore onto the daily chart, the Sterling bulls would certainly has regained overall control on a move back above $1.6517 from the 10th January which is the key reaction high in the two week correction that cable has been undergoing.
Yesterday we highlighted the looming key resistance on the daily chart at 105.12 and that the intraday uptrend was beginning to roll over on the hourly chart. This has continue to play out overnight as Dollar/Yen has peaked at 104.92 and begun to struggle under the former intraday support and now resistance at 104.51. There is now a battle for control intraday and a failure of the support at 104.06 would probably now signal a resumption of the correction lower. Back above 104.51 would re-open the 104.92 high and 105.12.
The gold chart has entered something of a quiet period with an $11 range formed between $1234 and $1245. Intraday technicals are fairly neutral and we await the next real signal. The daily chart continues to show the downside pressure on gold, however a confirmed break above $1250.78 would be needed for the gold bugs to become more positive.