Quote from Nick on 16th December 2020, 10:04 am

FTSE 100 live outlook prediction analysis for 16th December 2020

Brexit was the theme of the day as investors remained optimistic that a trade deal between the UK and EU could be signed ahead of the Dec 31 deadline, the point when the UK stops following EU rules.

The hopeful sentiment was mostly shown via a surge in the pound, which climbed as much as 1pc to $1.3452 against the US dollar. London’s blue-chip index, however, slid 15.81pc to close at 6,513.31. Banks continued their surge on the hopes of a Brexit agreement being signed.

Moderna Option

Moderna’s vaccine is safe and effective for preventing Covid-19 in people ages 18 and older, U.S. regulators said Tuesday, clearing the way for a second shot to gain emergency authorization. The Food and Drug Administration also said that the experimental vaccine is 94.1% effective at preventing symptomatic Covid-19, confirming earlier results, but agency advisers still have to vote on whether to recommend authorization before a final FDA decision. Elsewhere in Europe, regulators will review Pfizer’s vaccine earlier than planned, and Sweden's hospitals are facing a staff shortage.

Markets Rally

Asian stocks looked poised for gains after their U.S. peers halted a four-day losing streak, as Congress moved toward a spending package that would boost the economy. Futures pointed higher in Hong Kong, Japan and Australia after the S&P 500 rebounded from its longest slide since September. The 10-year Treasury yield moved above 0.90% as investors awaited the conclusion of the Fed’s two-day meeting on Wednesday. The dollar weakened for a second day. Oil advanced with gold.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks advanced after their U.S. peers rose for the first time in five days, as Congress moved toward agreement on a spending package that would boost the economy. Treasuries were flat ahead of the Federal Reserve’s policy decision.

Gains were modest but broad-based and a gauge of Asia-Pacific shares was set for another record close, with Australia outperforming. European futures pointed higher. Senate Majority Leader Mitch McConnell said he will keep lawmakers in Washington until a deal gets done. The 10-year Treasury yield remained just above 0.90%, with speculation rife that the Fed will either offer guidance on or adjust its bond-buying program.

Elsewhere, the dollar steadied after Tuesday’s decline and oil slipped. U.S. equity futures were little changed.

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

I am still holding the long from 6490 from yesterday and the stop is now at 6510 locking in some profit. The pattern of "buy the dip" still seems to be the right one still for the moment and the S&P is continuing to push on. It has moved above the 3685 resistance level so the bulls will be keen to jump the next one at 3705 again, as that re-opens a possible test of the 3730 level. That in turn should help pull the FTSE up with it, and a rise back above 6600 would fit quite well. 6700 by the Christmas break?

For today we have initial support at the 6530 level as the 2 hour chart has gone bullish again, with the rise yesterday and we have Hull moving average support here. That ties in with the daily pivot and the 30min coral here as well and as such, should we get an initial dip down to here then I will add to my long at this level. Initially the bulls will need to break the 2h coral line which is at 6562 as resistance, and if they manage to do that we should get some more upside. That resistance level though is just below the key fib and R1 which are both at the 6575 area so the bulls won't have it all their own way. Stay nimble!

For the bears they will be looking to break below the 6525 level, as we would then likely get a drop down to yesterdays low and we also have the key fib at 6488 today. S1 is slightly higher though at 6498. A break of that lower support and we would likely see a slide towards the 6452 level where we have S2. That said, the momentum does seem to be with the bulls at the moment, but do keep a close eye on the resistance levels as we know how quickly things can change.

Brexit, virus news, vaccines and stimulus continue to dominate the headlines. Deal on, deal off, deal on, deal off - will be an 11th hour thing as it always is with these things.

So fairly simple plan today really, looking at 6530 as the key support and hopefully run the long from yesterday a bit longer. 6575 and 6605 as the main resistance levels.

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