6825 support has held | Bulls appearing for 7000 next | Option expiry today | Learn to trade | Analysis | Forum

Bull Monday to continue with 7375 74150 resistance today | 7305 7250 support | Tory lead polls

18th January 2019

The FTSE 100 lagged its rivals yesterday after the pound’s strongest surge versus the euro in almost a year pulled down the index’s large contingent of overseas earners. Global stocks were buoyed by Goldman Sachs and Bank of America beating Wall Street estimates after an unsteady start to US earnings season but the internationally focused FTSE 100 shed 32.43 points to 6,862.68.

Sterling’s rally gathered momentum on currency markets as traders upped their bets on cross-party talks resulting in a softer Brexit deal or a second referendum. The pound climbed to a two-month high against the euro as Theresa May met with MPs to strike a deal that will receive the backing of Parliament.

Despite Jeremy Corbyn’s refusal to meet the prime minister until she rules out a no deal scenario, the pound jumped a further 1pc against the euro to €1.1385, leaving the currency on track for its strongest weekly gain versus its rival in 16 months. It extended its gains after the Labour leader admitted that his party could back a new vote amid pressure from members.

The S&P 500 pushed above its average price for the past 50 days, a level it hadn’t breached since December, after the Wall Street Journal cited people close to discussions saying Treasury Secretary Steven Mnuchin is a proponent of easing tariffs. The Treasury denied the report. Neither Mnuchin nor U.S. Trade Representative Robert Lighthizer has made any recommendations with respect to tariffs or other parts of the negotiations with China, according to a Treasury spokesperson working with the administration’s trade team who characterized the talks as an ongoing process. Shares had advanced earlier in the session after strong data calmed concern that the world’s largest economy was in danger of contracting.

The FTSE dipped below the 6825 daily moving average support to test 6800 but then bounced back slowly to test the 6860 resistance area overnight. With the S&P holding the 2600 support yesterday things look positive still for a push towards the 7000 level, and the 2 hour chart is now showing support at 6840. The Dax also tested its daily moving average and found support at the 10830 level and has climbed nicely from there – it’s possible that we see a bit of upside over the next few sessions……..



FTSE 100 Trading Signals, Forecast and Prediction

Things are looking more positive. There we go, I have said it! If 6840 holds today then I think we will see a rise towards 6900 and maybe higher. There is initial resistance at 6875 to start with today so we may see a drop from here down towards the support level before some more upside later on. The US showed yesterday that it wants to rise, even on what turned out to be a fake news story, and the S&P has pulled away from 2600 level now.

As long as the FTSE can hold above the 6825 level then we should see some more bullishness coming through. However, if it breaks below 6825 then we are looking weaker and my bullishness is misplaced! As such, I am then looking at support at 6793 where we have a fib level, but also more likely the 6720 level.

6825 support has held | Bulls appearing for 7000 next | Option expiry today | Learn to trade | Analysis | Forum
6825 support has held | Bulls appearing for 7000 next | Option expiry today | Learn to trade | Analysis | Forum

We have a decent cluster of support at the 6830 to 6840 level with the pivot, 30min coral, 2 hr moving average and yesterdays close all around here so there is a pretty strong case for that level to hold any early test this morning. Of course, it can all change in an instant as the politicians start opening their mouths and Brexit stuff looms large.

Fairly simple plan really today with that 6840 area looking key. A further climb ahead of the weekend would be good for keeping January bullish for the moment. Good luck today and have a great weekend.

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