4th January 2018
The FTSE 100 managed to push through the 7673 resistance level yesterday, helped by cable dropping off the 136 resistance level and the US bulls displaying a show of force, with the S&P finally breaking the 2700 level. 2 days into the trading year and 2 days of record highs. The FTSE 100 looks like it will test 7726 today where we have a key fib level and if the bulls can make yesterdays gains stick. There was a brief pull back overnight with the dip back down to 7675 to test the support level which has held. Gold ended its run at the top of the 10 day Raff channel at 1320 and dropped back to 1305 overnight, with the bulls keen to hold it above 1300. We have NFP news out tomorrow, and may well see a run higher over the next 24 hours heading towards that.
Europe’s day has U.K. house prices, services PMIs for Spain, German, France, U.K., the euro zone and others. The U.S. features St. Louis Fed Bank President James Bullard delivering a keynote address in Philadelphia the day after minutes of the Federal Reserve’s December meeting showed officials continued to back gradual rate increases. We also get ADP employment data as a precursor to Friday’s nonfarm payrolls.
FTSE Outlook and Prediction
For today I am watching the early support area at a 7675 where we have the daily pivot and the 30min coral, and 7725 for resistance, where we have a key fib level and R2 for today, The bulls have held onto yesterdays gains, but I am also seeing the Dax and S&P nudging the top of their 10 day Raff channels, while the Dax is also hitting resistance on the daily chart at 13055. If they do see a bit of profit taking ahead of NFP then we may follow suit, even though we are less correlated to other markets that we used to be. Cable is the driving force behind the FTSE 100 at the moment, continuing last years theme.
If the bulls can defend any early drop down to 7675 then we should be on for a rise towards the 7725 level. However, if the bears break this support area then the next support area I am watching for today is 7627 – we have a fib level here and also just above S2. There is still a chance that we get a dip down to the 25ema on the daily chart which is sitting at 7547 currently, and if so that would make a decent springboard before a further push higher – thinking towards 7800+
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