4th August 2017
Decent rise for the Dax and FTSE 100 yesterday though the US was lagging a bit ahead NFP today. The Dax managed to hold the 12100 area for a rise back towards 12185 but then also hovered around there. The FTSE didn’t quite get as low as the key support at the 7370 level, testing 7380 then climbing for most of the day. The FTSE jumped on news that the BOE policymakers will keep interest rates on hold at a record low of 0.25pc, as they said stronger exports and investment would help to offset slower growth in consumer spending amid a squeeze in real incomes. They also trimmed their growth forecasts (or guesses as they are known!) to 1.7pc in 2017 and 1.6pc in 2018, down from a May projection of 1.9pc and 1.7pc respectively.
Of course, todays big event is the NFP news at 13:30. The forecast is that US employers added 180k jobs last month.
On a Friday it can be wise to take more of a back seat. Many traders struggle on Fridays as the market can be a bit more irrational (mainly due to low volume), and lots do smaller stakes than the rest of the week. It’s a day for caution, especially with NFP, as many a trader has lost their weeks gains on a Friday.
FTSE 100 Outlook and Prediction
For today I am mostly expecting a bullish day and think that we might well see a rise towards the recent high area at 7515. We have a key fib pivot level at 7503 first though and that might stall any rise though. We also have the 10 day Raff channel at 7514 tallying nicely with the recent high. As such I feel that shorting this 7503 to 7520 area is worth a go today. We may well see a bit of buy the rumour, sell the news day with an inverted V shape playing out.
For support we have the daily pivot at 7447, but then below that we now have a bullish 2 hour chart thanks to yesterdays rise, that has support at 7435. The daily chart is also positive again, showing moving average support at 7425. As such I am thinking that an initial dip down to these support areas before the bulls come in for some NFP action and a bet on it beating expectations again.
We still have next weeks 40 point divi in play so unlikely to see too much of a sell off prior to that.
So all in all its a day to stay nimble again as its going to be an interesting one!
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