23rd October 2017
Fairly quiet on the news front over the weekend. We have PM May briefing parliament today on the Brexit negotiations (this and cable are suppressing the FTSE bulls for the moment). Abe selection in Japan paves the way for more bullishness there with looser monetary policy. The US is also being driven by a higher likelihood of Trumps tax reforms going through, with the Dow well on the way to 24k currently!
The FTSE 100 has failed to break above the 7555 resistance area for the whole of last week, despite the US rising strongly. That level still looks pretty key resistance for today, however there is much closer resistance at the 7533 area this morning. Despite the “bull Monday” mindset that has been prevalent for most of the second half of this year the 30 minute chart looks quite weak to start off with today. As such I am thinking that any initial bounce at the open will be sold into and we get a drop down towards the 7485 area. We have S2 and a key fib level here so the bulls will be keen to defend this.
If the bears break below the 7470 level then a drop down towards the 7430 level looks viable, but 7470 is the 25ema on the daily chart and looks ripe for a bounce. The daily RSI has also dropped back a bit down to 59 currently.
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