Can the bulls defend the 7591 level today | NFP later | 7657 resistance | Buy the rumour sell the news

FTSE 100 live outlook prediction analysis for 10th January 2020

Germany’s DAX index closed at a two-year high yesterday as investor optimism sweeps shares higher, while the FTSE 100 managed to nudge higher.  Here are the key events yesterday as we head into the first NFP news of the decade today.

• Sterling drops to nearly $1.30 after Bank of England Governor suggests further slowdown would favour ‘prompt response’
• Markets rally after Trump says Iran ‘standing down’

Stocks rallied somewhat, the dollar jumped and oil prices steadied as traders saw an easing of tensions between the United States and Iran.
Stocks in London were fairly flat on closing though the FTSE 100 managed to push higher, ending 0.31pc higher to 7,598.12. The more domestically focused FTSE 250 closed 0.04pc lower to 21,643.07. Retail stocks failed to perform today, with Marks and Spencer tumbling 9pc after posting  a 1.7pc fall in sales in its latest update. In the eurozone the CAC and DAX rose 0.19pc and 1.31pc respectively.

Markets Mixed

Stocks in Asia are set for a mixed start as investors monitor an easing of geopolitical tension and await the latest reading on the U.S. labor market. U.S. equities earlier rose to all-time highs, futures edged up in Japan and Australia, while Hong Kong contracts dipped. The S&P 500 Index climbed to a fresh record Thursday and the yen dropped to a two-week low versus the dollar as tension in the Middle East ebbed. The greenback gained against major currencies for a third straight day after jobless claims fell by more than expected, adding to signs of economic strength ahead of the U.S. payrolls report Friday. Ten-year Treasury yields declined following a government auction. Elsewhere, oil traded close to the lowest level since mid-December amid the receding concerns about U.S.-Iran conflict and gold edged lower.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Today is of course the first NFP news release of the year and the forecast is 160k versus 266k last time (which smashed estimates). As such todays will be closely watched yet again. I am expecting a buy the rumour sell the news pattern to play out today and for the S&P to continue its rise towards the 3300 level today. That should help to pull the FTSE up towards the 7662 level where we have R2 and a key for for today., and we may well then see some profit taking here and also some shooters appear. The volumes have been quite low this week which is why its been a bit choppy, and coupled with the Iran situation we have drifted around a bit.

If the bulls break above 7662 then we should see further upside towards the R3 level at 7686. Generally, with the daily chart and 2 hour still bullish, and the move down to the 25ema on the daily (slightly surpassed at the time due to the Iran situation) holding it all looks like we are on for a decent bit of upside and I wouldn’t be surprised if we exceed the 7700 level by Mid January. We also have the Davos summit coming up which usually sees a bit of a rise.

If the bears were to break below the pivot at 7610 today then the next main support is 7591 where we have the 200ema and the line that we bounced off last night (at 7585). It is also the 100 Hull line on the 2 hour that we haven’t tested for support yet since crossing to bull and as such is a decent level to go long on. Below this then the coral is now green (bullish trend) not he 2 hour and showing support at 7577 for now.

As its Friday, and NFP I tend to do lower stakes and also be a bit more cautious, but I have gone for a wider stop not e long than normal owing to lower stakes.

Watching 7610, 7591 and 7577 as support today, with resistance levels of note at 7662 and 7686. Good luck today and have a great weekend,

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