3rd February 2017
FTSE 100 Support 7138 7119 7095 7080 7067 7026
FTSE 100 Resistance 7143 7145 7156 7172 7173 7185 7192
Good morning. The FTSE 100 and the GBP/USD (cable) continued their inverse relationship yesterday with cable dropping form 12700 helping the FTSE to rise from the 7100 level. After cable had steadied at 125ish then the FTSE stalled at 7165, where we also had the 10 day Raff resistance. It dropped off after a while to 7130, then rose again to 7160 but has dropped off again overnight. Looking at the daily chart there is a possibility of further downside from this area as we are at the top of the 10 day Raff and Bianca channels, and the moving averages on the daily are brewing for a crossover to bearish (both the ones I look at are sitting at 7157). The rise was also helped yesterday by the BOE raising their growth forecasts to 2% (and inflation for 2% as well), as well as unanimously voting to keep rates and QE unchanged. Am going to watch cable quite closely as if it breaks 125 then it could be on a path back to 115. If it holds then it might be on for the rise to 129. And obviously that will effect the FTSE 100 also.
FTSE 100 Outlook and Prediction
Here we are again with another Friday. And another NFP* news release later at 1330, forecasted to be a 175k increase, versus 156k previously. This morning we have the pivot for a bit of support at 7138, however as I am writing this both the 10min and 30min charts have resistance at 7143 so it could be an interesting open. I am not too keen on entering a trade at 6am so am holding off a short at 7143 for the moment, as it is possible that we get an initial rise to test the top of todays Raffs channel at 7173. We do also have the top of the 10 day Bianca at 7156. 7192 for the 20 day above that. As such I am thinking that the bulls might fail to really push on today (especially if cable bounces from the 125 level). As such I am thinking that once again shorting the rallies is a good plan for this morning/today and see where we go. The SP didn’t manage to put on much past 2284 yesterday and has trod water a bit since around the 2277 level.
If we break below the pivot this morning then we might well be on for another run down to the 7100 level, and another test of this may well see it break for 7080 and lower. There is still the 7185 level as resistance on the upside as well, tallying with the 2 Bianca channels for the moment. If this morning is weak then the daily chart should start to confirm bearishness and we will more than likely resume the run down from this 7160 level. So bit of a make or break day today really. Bulls will be keen to push above 7185, whilst bears are eyeing up 7080 and lower still.