7th March 2017
FTSE 100 Support 7355 7353 7349 7343 7326 7299
FTSE 100 Resistance 7372 7384 7390 7392 7427 7452
Good morning. Bit of a slow day on the FTSE 100 yesterday as we head towards the budget, though the 7345 support held all day, despite a couple of attempts by the bears to break below it. They couldn’t make it stick and then we had the largest rise just before the bell when we managed…… 7360! Managed a few points off the long but not as many as hoped. Overnight has hovered around the same level, as Asian markets assessed the prospects for further gains after a rally leading up to a near-certain U.S. interest-rate increase. The bulls will be keen to push for further rises on the FTSE today, to test the 7400 and then 7430 areas.
FTSE 100 Outlook and Prediction
We loosely had a bull Monday yesterday so might well keep the pattern going and have a bear Tuesday. The merger between Standard Life and Aberdeen Asset Management helped keep the index positive. However, I am expecting an early rise towards the 7392 resistance area this morning and it will be interesting to see if the bears appear there. We have resistance here and then again at 7400. If the bulls are able to break this then 7427 and 7450 are the next areas of note. The latter might well be worth a short to hold for a few days as well. Of course we have the budget on Wednesday to bear in mind and how the market might react to the possibility of tax increases.
We seem to be doing the opposite to the US at the moment so the powers that be are still slightly worried about our economy – US put interest rates up, we reduce, US talk about tax cuts, we talk about tax increases. The FTSE 100 is still being very influenced by GBPUSD exchange rate. If Sterling rises the the FTSE 100 is going to drop back. A recession is on the cards because of Brexit. Not a done deal but a real possibility. In that scenario Sterling has to fall further, which will support the FTSE 100, but we also need to be mindful of US policy to repatriate trillions of offshore dollar/profits held abroad due to high corporation taxes in America. That could cause sterling to rise.
Anyway, enough big picture musings. For today I am expecting a rise and dip day. The 30min chart is still looking positive for some early strength, with the green coral now showing support at 7353 where we also have the daily pivot. Might be worth a long around here to target 7390/7400 initially. Then its really up the bears if we get to that level and what happens next!