15th June 2017
The Fed hiked rates on Wednesday and maintained plans to go ahead with another increase by year-end. The central bank gave a fairly detailed update on its approach to balance sheet normalisation, which revealed a relatively aggressive path for a reduction in its bond holdings. Fed Chair Janet Yellen shrugged off soft inflation as “transitory,” and said an end to reinvestments could come “relatively soon.”
There wasn’t much of a dip to start the day yesterday, with the FTSE 100 finding support at the 7490 level and climbing to the fib level and top of the Bianca channel at 7545. Turned sharply there and fell right back down to our 7460 support before bouncing a little bit again. Usual buy the rumour, sell the news sort of day in the end.
FTSE 100 Outlook and Prediction
The bears still haven’t managed to break the 7460 support level and its held overnight also. Below this then we have support at the 7431 level which is just below the key fib level at 7438 and just above the 10 day Bianca at 7428. I am thinking that we will get a dip to that level this morning as the sell off from the 7545 level continues, though the proviso is that the bears break 7460. If the 7430 area holds this morning then we might well rise back up – I think the US will support a rise as they wont want the Fed decision to look like it started a sell off. All about appearances and what people think.
Gold has dropped off from its highs, and cable continues to hover around the mid 127 level. Despite the US rising rates I think the UK ones are going to stay lower for longer yet.
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