FTSE 100 prediction | Resistance 7222 7256 | support 7171 | learn to trade

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FTSE 100 Support 7171 7147 7137 7135 7116 7024
FTSE 100 Resistance 7190 7216 7222 7256 7271

Good morning. That was a strong start to 2017, with the FTSE 100 testing the 7200 level twice but failing to hold above it on both occasions. Despite a pretty weak US session which saw the S&P fall from 2264 to 2244 the FTSE remained fairly strong, only dipping to 7180. That shows that the bulls still have the momentum and the power for the time being. However we do have the top of the 10 day Bianca channel at 7190…. Overnight the S&P has bounced back to 2260, but the top of the 10 day Bianca channel is 2261…. With the daily RSI on the FTSE at 82 now, I am thinking that a dip to 7025ish before another leg up would play out pretty well.

US & Asia Overnight from Bloomberg

Stocks in Asia climbed and S&P futures pointed higher after data fueled confidence in the U.S. economy, and as equity traders in Tokyo returned from holidays with the yen in a four-day slump.

Japanese equities were set for the biggest gain in two months with the Topix index climbing more than 2 percent on its first trading day of 2017. Chinese shares climbed for a third day, while Australian, Indian and South Korean shares edged higher and Hong Kong equities declined. The S&P 500 Index posted its biggest climb in four weeks and the dollar extended gains as U.S. manufacturing grew. Oil recouped some of Tuesday’s slump ahead of stockpile data.

A global equity rally has extended into the new year as data from the U.S., China and Europe boosted optimism for growth. Traders look to be shrugging off doom-sayers such as former Treasury Secretary Lawrence Summers, who warned that President-elect Donald Trump’s policies might have unintended consequences for the world’s largest economy, and analysts at Eurasia Group who said that America’s 45th president could contribute to a level of global instability not seen since World War II.

“Markets have been rallying quite strongly on this notion of fiscal hope but, as we move into the reality of 2017 and what a Trump presidency will actually look like, there is some risk of fiscal disappointment,” Paul Eitelman, a Seattle-based strategist at Russell Investments Ltd., which oversees about $244 billion, told Bloomberg Radio’s Asia Daybreak program. “Any disappointment at this point could be a source of downside risk for markets from here, so we’re incrementally being a bit more cautious.”

Stocks

The MSCI Asia Pacific Index was up 1 percent as of 3.07 p.m. Tokyo time. The Shanghai Composite Index rose 0.7 percent and was at the highest in three weeks.
The Hang Seng Index fell 0.1 percent and India’s S&P BSE Sensex added 0.1 percent.
New Zealand’s S&P/NZX 50 Index rose 1.4 percent, while Australia’s S&P/ASX 200 Index was up 0.1 percent.
S&P 500 Index futures rose 0.1 percent after the underlying index Tuesday added 0.9 percent to 2,257.83. The index advanced 9.5 percent in 2016.
Japan’s Topix index and Nikkei 225 Stock Average both gained at least 2.4 percent, the best first day of trading since 2013. The Topix lost 1.9 percent in 2016, its first annual loss in five years.

Currencies

The U.S. Dollar Index was up 0.1 percent, near its highest level since December 2002.
The yen traded at 118.16 per dollar, down 0.3 percent.
The offshore yuan strengthened 0.2 percent to 6.9432 per dollar and the onshore yuan rose 0.1 percent to 6.9554.
South Korea’s won slid 0.3 percent.
The Aussie gained 0.2 percent to 72.38 U.S. cents, while the kiwi fell 0.1 percent.

Commodities

Crude oil rose 0.8 percent following its 2.6 percent slide to close at $52.33 a barrel in New York after touching the highest level since July 6, 2015, at more than $55. Futures rose 45 percent last year.
Gold was up 0.2 percent after jumping 1 percent in New York Tuesday.
[Bloomberg]

FTSE 100 Outlook and Prediction

The key to today will be if the bulls are able to break the double top from yesterday at 7206. If they can then a rise to 7255 and possibly 7271 looks possible. It tested that 7206 twice yesterday so a third test today would likely see it break. There is initial resistance at 7222 where we have R1 and the top of the 10 day Raff channel, and with the daily RSI testing 82 currently. the top of these daily channels (7222, 7256) are likely to see some shorting. That said, this move up is pretty strong still with the momentum still with the bulls.

Support initially is at the daily pivot at 7171, though if this breaks then the 200ema at 7136 on the 30min is the next area – we also have S1 here. Below this then 7090 is still the key line in the sand, as a break below this changes the picture to a fairly bearish one. That said the bottom of the Bianca channels are at 7147 (10 day) and 7116 (20 day) so likely see some support here on any moves down.

The key at the moment is not to fall in love with the upside, as shown by the S&P yesterday – there are still some bears around even if they can’t currently make the turn down stick! On the FTSE I am watching the 7255 and 7271 areas closely for the rise to start running out of steam. Though of course it can still break through them so stay nimble!