8th February 2017
FTSE 100 Support 7172 7160 7147 7122 7101 7098
FTSE 100 Resistance 7187 7195 7196 7212 7216 7226 7238
Good morning. Decent rise on the FTSE 100 yesterday and then a fall back to where it started, all mostly driven by the GBPUSD/Cable rate which was -100 at one point before climbing back to +50. The pound turned positive in late trade after Bank of England policymaker Kristin Forbes hinted at a UK rate hike. The bulls managed to hold the 7165 low for a rise to 7225, though the top of the 10 day Raff here stopped them. If they had managed to break 7225 then the 7250 looked likely but alas not. For the moment the support area is still intact at 7170 and the resistance at 7225.
The bulls will need to come out fighting today if we are to revisit that area, or possibly rise to 7250. We are still in a buy the dip sort of mentality on stocks, most prevalent in the US as investors are worried about missing out on a continuation of the Trump rally.
PM Theresa May last night comfortably defeated a Brexit rebellion in the Commons as MPs rejected Labour plans to give Parliament a “meaningful” vote on the terms of a final deal.
In the absence of any particularly bearish news I see that they have brought the Greek debt crisis back to the forefront again too. Must be some bears being squeezed!
FTSE 100 Outlook and Prediction
The bulls will need to be quick out the blocks this morning, same as yesterday really, to defend this 7160/7170 support area and try and break through the 7225 resistance level today. If they don’t and the bears take us below 7160 then we look likely to be on a path to retest the 7100 level and probably lower.
Traders have certainly got it all to contend with at the moment, trying to make sense of Brexit, sterlings movements, Trump’s policies, now Greece, and how well the UK economy is actually doing. The US is remaining pretty upbeat with the Dow holding above 20k, and the SP hovering around 2300.
These are the 2 main levels to watch today really, 7165 and 7225 with a break of either likely to lead to a continuation. I think though that the bulls might have the upper hand and we get a rise to test the top of the 10 day Bianca at 7226 again, and possibly the 10 day Raff again at 7235 today. Overnight the support area has held, and cable has dropped back a bit to hover around the 12500 level. Again, I think most FTSE 100 moves will be currency driven, and the recent high on cable at 12700 remains intact.
Initially there is resistance on the 30min chart at the daily pivot at 7187 as well as a red coral indicator, so we may well get a small pull back initially towards the 200ema at 7172. There is also resistance on the 2 hour chart at 7195 to start with, though the bears seem to be ignoring any 2 hour resistance levels over the past few sessions to short from – will they today?
There is a 1.7 dividend today on the FTSE 100.