7th January 2019
Friday saw a low of 6720, just above the 6710 support which was frustrating in a way as the rise then managed 6840! NFP saw a big beat, coming in at 312k. probably reflecting the seasonal period more than expected.
Investors also cheered Beijing injecting more cash into its banking system to tackle the country’s recent slowdown. The People’s Bank of China cut the amount banks have to hold in reserve for the fifth time in a year to stimulate lending after gauges tracking its manufacturing sector slumped into contraction territory earlier this week.
Wall Street followed European markets higher, bouncing back after the US economy created a bumper 312,000 jobs in December, brushing aside fears that the global slowdown has spread to the US. Jerome Powell, the head of the US central bank, then turbocharged the global recovery after allaying concerns that the Fed would ignore market turmoil to push ahead with reversing post-financial crisis stimulus too quickly.
Looks like we are risk on still for a short while at least, as Asia was bullish today, and the charts are looking favourable for some further upside. The 2 hour FTSE 100 chart has support at 6770 (but steadily rising this morning) so a dip to here would be worth a long. A bull Monday on the cards and buy the dip today, though decent looking resistance around the 6900 level to start with. There is long term resistance at 6990 and the bulls will need to break above this level to stand any hope of pushing on.
FTSE 100 Trading Signals, Forecast and Prediction
As mentioned above the 2 hour chart is bullish, with support currently at 6770, however that is steadily rising as the price holds at these higher levels. If we do drop back later on then it might well tally with the 2 hour support rising towards 6785ish. As such I have put a long here, as it is also just below the pivot at 6789. Basically, around this area looks good for support!
The slight spanner in the works for the bulls is that we are near the top of the Raff channels. The 10 day has resistance at 6931, while the 20day is lower at 6880 – the level we have dropped off overnight. As such, be careful not to fall in love with the upside for the moment, as we are probably just seeing a start of year pump. Until it breaks 6990 the bias is still bearish on the bigger picture.
Fairly simple plan for today really as looking for an initial rise and then a dip down. The S&P has 2 hour support at 2496 and a green coral at 2489, again quite far away after that decent rise on Friday. However, any dip down o that area may well see it hold. On the Dax, 10600 and 10550 are the 2 hour supports of note, the latter worth a long as also a fib level here. It would have to be quite a bearish Monday though to see those levels. But you never know!
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