5th May 2017
Good morning. The bulls failed to break the 7285 resistance level and the market stalled just shy of the order again, topping at 7282, which is starting to get annoying! Oil continued to decline yesterday, falling below $50 per barrel, and cable rose, with the GBP/USD rate hovering around the 129 level – both of these helping the FTSE 100 bears. The ASX200 was weak again on Friday, again pulled down by the miners, and I expect the FTSE 100 will see some weakness again today.
Todays main news will be Non Farm Payrolls at 1330, forecasted to be 190k versus 98k previously.
The services sector purchasing managers’ index (PMI) from IHS Markit rose to 55.8 in April, up from 55 in March. Any score of above 50 indicates the sector is growing. “The level is consistent, on the basis of past form, with quarterly services sector growth of around 0.7pc – well above the 0.3pc rate seen in the first quarter,” said Scott Bowman at Capital Economics.
FTSE 100 Outlook and Prediction
For today I am again feeling like we will be predominantly bearish. We have resistance at the 7255 area with the daily pivot where and also the 30min coral trend indicator.If the bears do drive the FTSE 100 down from this level then a drop down to the fib level at 7209 looks possible. Below this we open up 7200 and then 7170 – a key level with the bottom of the 10 day Bianca here and S3. If this breaks then I wouldn’t be surprised if we shortly reach 7100.
If the bulls are able to push the price above the 7255 level then 7285 is still resistance, though the 2 hour chart has weakened off now, and might make things harder for the bulls – its not confirmed bearish but definitely looking like it shortly might be. Gold has risen from its low yesterday (still got the 1230 long running at the moment).
So, fairly simple plan really looking to short the rallies again, but be wary of a Freaky Friday with NFP at 1330. Also, we have the French election on Sunday so traders might well start to bank profits, especially on Dax…. though that seems to be the index that only rises the past 2 weeks!