7360 is resistance today | 7326 support | Pound slumps on hard Brexit talk

16th January 2017

FTSE 100 Support 7338 7326 7316 7308 7305 7265
FTSE 100 Resistance 7353 7356 7358 7359 7378 7380

Good morning. Lively start to the week ahead with the pound gapping down below 12000 on Sunday night to print 11988. The US markets are also closed today for Martin Luther King Day. The pound fell on comments from Teresa May about hard Brexit again and also plans to quit the single market completely – start afresh with a clean slate. With the pound dropping to that level last night I did expect to see FTSE futures up higher than the 7355 area to be honest when i woke up, but they have already dropped back from the 7358 high. This was Fridays resistance level so we might see a drop back after all that if that 7358 stays as the high for the short term.

FTSE 100 Outlook and Prediction

For today I am sort of expecting that 7358 area to stay as resistance and we get a bit of a dip down. Th pound has risen back up above 120, though is still weak and off 160 pips, and the FTSE resistance level there at 7355 (from Friday’s email) is still in tact. There is support on the 2 hour chart at 7338 now, so the bears will need to break that, and then we have the pivot below that at 7326. With the US closed it can be a “slow” day, however after that Brexit talk from Teresa May, we might get a bit more volatility than usual. The ASX200 followed a similar pattern with a slow move down during their Monday session.

So for today, there is a possible long set up at the 7326 area, though the bias for me today is a short around the 7358 area – as you know I was hoping for this level on Friday so get short on. But as we have now tested it out of hours and it has remained as resistance I think its worth a go shorting it today if seen. We also have R2 at this level. I am also mindful of the fact that we have repeatedly set some new highs on the FTSE, the daily RSI is 91, and wonder how much longer this rise will go before we get a pull back before the next rise. The daily chart is looking at a swing long at around the 7150 area now. Would be a good level to pull back too.