Technical analysis for FTSE 100 for 17th January 2025
Well that was a lot more bullish than I expected yesterday and rare for the FTSE100 to trend upwards for two sessions on the trot with no really reaction at resistance. It does though set up a decent play for shorting the rally today and initially we have 8460 as resistance with 8503 R2 above this. 8460 is the R1 level and also just below the 10d Raff channel (both Raff channels still heading upwards..... buy the dips on the longer timeframes still playing out) so we could stall here initially. If the bulls manage to break 8460 with conviction then we may well pop a bit higher towards the 8500 level and given it's Friday ahead of the inauguration we could see some profit taking.
Initially we have retail sales out for December at 0700 which have just come in below forecasts. Markets will be hoping that means more interest rates cuts likely (I still favour February for the next one, with a 0.25% cut). Retail sales dropped by 0.3% last month, slipping from a revised gain of 0.1% in November, according to data released by the Office of National Statistics. Retail sales rose by 3,6% on an annual basis, below the 4.2% growth expected, having seen no growth in November.
Similarly, data released on Thursday showed that Britain's gross domestic product rose by just 0.1% in November from October, after falls in September and October. This softness in the fourth quarter marks a significant slowdown in growth momentum and output activity compared to the robust performance in the first half of the year.
In short it feels like a short the rallies sort of session is on the cards today as we see some profit taking ahead of the weekend following Monday's low and pre US election gap close. As such a dip down towards the 8400 level, and possibly even 8340 may well play out.
The bulls will of course be keen to defend the 8400 round number having managed to get it this high and with 8500 in sight.
So, looking at 8460 and then 8500, but if the bulls were to really go for it today then 8580 is R3 but that feels a big ask, especially as we are nearing the top of both the daily Raff channels.
Moving onto supports, and the daily pivot looks viable initially but seems a long way away at 8383... Prior to that we have the 30m coral and the EMA at 8415 to help initially, however if we were to break this then 8340 S1 and the key fib (8331) would be the next level, though the optics for that are very bearish which the market might want to avoid given its 130 points below where we are as I write this!
So keep an eye on 8460 and 8500 for resistance, 8415, 8383 for support.
Good luck today and have a great weekend.
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