19th July 2017
Inflation came in at 2.6% for June, slightly bettering the 2.9% that was forecast. The market started rising about half an hour before the scheduled news (suspicious!) from the 7357 level where we had our fib line for support. After printing that low, the FTSE 100 stayed relatively upbeat, though the short managed a few points from 7404 to 7385.
Overnight, strength has returned with Asia advancing back towards its record highs. We have the ECB meeting tomorrow with the general consensus being they will keep everything as is. Meanwhile, the chance of the Fed raising rates before year end has dropped to 40%.
Concerns about the U.S. administration’s ability to enact fiscal stimulus after a crucial health-care bill was scuppered, as well as weak inflation data, left investors questioning the strength of the global economy, sending Treasuries, bunds and gilts higher. The dollar held at the lowest level in almost a year.
FTSE 100 Outlook and Prediction
For today I am expecting us to remain bullish and build on the overnight strength. We may well get an initial dip down but with support at XXXX and XXXX I am thinking that this area will hold for a push towards the top of the 10 day Bianca at 7453. Above this then the daily Raffs are showing resistance 7474 and 7500 – levels that are not out of the question this week.
The 30min chart is bullish to start with, mainly helped by Eastern markets rising. The ASX200 had a decent rise today as well. The Dax was a bit spooked yesterday, dropping sharply but largely remained self contained as most other markets remained resilient to that sell off.
If the bears were to break below the pivot today at 7392, then XXXX is next support, with XXXX below that. If the bulls cannot make this move stick today though, then they are going to be on the back foot – so make or break for them today. The pound continues to strengthen (and dollar weaken) with cable remaining above 130 still, in theory if that rises further it will put pressure on the FTSE 100, however it has held up well so far.
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