7665 7640 support | Bullish Monday | UK GDP | Earnings | Technical Trading Analysis

7550 key support - if that breaks then down to 7490 or lower | Analysis | Signals

29th January 2018

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Friday saw the 7620 support area holding well with a slow rise back towards 7700 over the course of the day and evening. With the US also rising that has carried through into Asia this morning, building on the strong start to 2018. Traditionally if January is strong then the rest of the year is likely to be also. Certainly still in buy the dip mode at the moment, though the FTSE has dipped a bit lower than the 7650 support we had pencilled in for a while. The 7640 level is now support on the 2 hour chart after Fridays rise. With a potential bull Monday, and the focus is back on earnings as we have tech and oil company results out this week. Sterling slipped from its recent high at 143 as Theresa May remained under pressure from pro-Brexit lawmakers in her Conservative Party.


FTSE Outlook and Prediction

For today I am expecting the bulls to build on Friday’s move up from the 7620 support area. We may well get an initial dip down towards the 2 hour support at 7640 and if so then this is a good spot to go long from. Monday’s closing level of 7665 is also an initial target area for the bears. Should the 7640 level break then it starts to look bearish again with the 7606 low area the next support, and we also have the daily coral line at this level. Should the bears break this the 7585 and the bottom of the 10 day Raff channel are the next levels to watch.

On the upside, the bulls will be keen to recapture 7700 and push higher than the overnight high of 7709. We have R1 at 7722 and a key fibonacci level just above that at 7728 which may well see any rise stall here. The daily chat is still bullish and with the dip down to 7610 the daily RSI is better positioned now for further upside.

Data on Friday showed that UK GDP rose 0.5pc in the fourth quarter and 1.8pc in the full year compared with 2016, according to preliminary figures from the Office of National Statistics. Expected good earnings data from Shell are also likely to push the FTSE 100 higher.

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