20th July 2017
Not sure why it dropped 50 points at the open, unless it was just a stop hunt – no other real reason for it. Anyway, a retest of the 7380 support level saw the bulls re-appear and brought it up to our resistance at the 7440 level before stalling there. There is still the chance that we are on for 7474 today, a level where I expect some stalling
The ECB is forecast to keep policy on hold today, and a report that the bank has been examining options for asset purchases adds to speculation that Mario Draghi will concede that the time is approaching to adjust the bond-buying program as the economic recovery expands.
Asian stocks climbed for a ninth straight day, spurred by fresh all-time highs for U.S. equities and as the Bank of Japan maintained its mega monetary stimulus. The Australian dollar reversed an advance that saw it jump closer to 80 U.S. cents after a jobs report.
FTSE 100 Outlook and Prediction
For today I am expecting the bulls to hold above the 7410 level and we see a test of the 7474 area. We have the top of the 20 day Raff channel just above this at 7484 as well, so if the bulls do rise to this area then we may well see a stutter around here. We also have the top of the Bianca channels fairly close by at 7453 for the 20day and 7469 for the 10day. There is only so long that US and Asian markets will keep making all time highs!
At 09:30 this morning we have retail sales data out in the UK, with the forecast to be a rise to 0.4%, versus -1.2% last month. Will it be that positive, not so sure! We also have the US jobs data out at 13:30 as well, and likely to provide more clues as to rate rises. Chances of a rate rise this year have dropped to 40% now. Gold rising suggests a hold on rates.
Support wise, we have 7410 on the 2 hour chart looking fairly key and also the 7380 level which was previous resistance and also support yesterday. The bears will still be keen to break this level as it opens up a run down towards 7300. For the moment though, things look bullish. That said, US fund managers are most underweight they have ever been on US equities!
Generally, the FTSE feels a bit toppy, as does the S&P500.
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