Learn to trade | FTSE 100 support 7175 | Resistance 7214 7240

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FTSE 100 Support 7184 7175 7168 7135 7110 7036
FTSE 100 Resistance 7202 7214 7240 7263 7301

Good morning. Well it took all day but the FTSE 100 finally rose from the 7171 level where we had the long to test 7200 again off the back of the Fed minutes being released last night. The FTSE was pretty lacklustre really yesterday as the S&P had a decent performance, rising from 2260 to 2270. Federal Reserve officials focused on the impact of potential fiscal stimulus during their December policy meeting, with many starting to worry that the central bank might eventually be forced to quicken the pace of interest-rate increases to head off higher inflation.

US & Asia Overnight from Bloomberg

The yen extended gains as traders digested minutes from the Federal Reserve’s December meeting, while a rally in Hong Kong lifted Asian equities. Oil halted a rebound near $53 a barrel.

Japan’s currency strengthened 0.7 percent and the Bloomberg Dollar Index dropped for a second day. The Hang Seng Index headed for the highest closing level in three weeks, and Singapore shares jumped the most since November. Stock indexes in Japan swung between gains and losses. The greenback fell as the Fed minutes highlighted concerns about the impact of a strong currency on the new U.S. administration¹s stimulatory economic policies.

Uncertainty over the path of U.S. fiscal policy weighed heavily on the Fed’s discussion of the economy and the path of monetary policy when it decided to lift rates last month, minutes from that meeting showed. Despite growing attention to the risks of fiscal policy spurring faster growth than currently forecast, most on the committee reiterated that a ‘gradual’ pace of rate hikes over the coming years would likely remain appropriate. Stocks have rallied with the dollar, while Treasuries have plunged since Trump’s election.

“President-elect Donald Trump remains an unknown factor in the growth equation even for the Federal Reserve,” said Jingyi Pan, a market strategist at IG Asia Pte based in Singapore. “A fraction of the committee members were noted to have abstained from accounting for the projected expansion in their forecasts.”

Stocks

The MSCI Asia Pacific Index rose 0.8 percent to a three-week high as of 12:53 p.m. in Tokyo. The Hang Seng rose 1.2 percent, set for the highest level since Dec. 14. Singapore¹s Straits Times Index climbed 1.2 percent, the most since Nov. 30.
Japan’s Topix index lost 0.1 percent and Australia’s S&P/ASX 200 Index advanced 0.4 percent. South Korea’s Kospi index slid 0.1 percent and New Zealand’s S&P/NZX 50 was little changed.
Futures on the S&P 500 fell 0.1 percent after the underlying gauge rose 0.6 percent in New York. The Dow Jones Industrial Average resumed its pursuit of 20,000, rising to 19,942.16.
The Stoxx Europe 600 Index fell 0.1 percent to halt a three-day advance that took the measure into a bull market.

Currencies

The Bloomberg Dollar Index extended losses, declining 0.4 percent, after touching its highest level since its 2004 inception earlier in the week. The measure has jumped 1.6 percent since Dec. 13.
The yen rose 0.7 percent to 116.41 per dollar after advancing 0.4 percent the previous session. South Korea¹s won jumped 1.2 percent, the most since September.
The euro climbed 0.3 percent to $1.0520 after jumping 0.8 percent in its first gain against the dollar this year, after the region’s inflation accelerated in December to the fastest pace since 2013.

Commodities

Crude oil futures slipped 0.2 percent after Wednesday’s 1.8 percent advance. U.S. crude inventories were projected to have declined while OPEC and other producers implement promised production cuts.
Gold rose 0.9 percent to $1,173.51, the highest level in almost a month.
[Bloomberg]

FTSE 100 Outlook and Prediction

For today the bulls will be keen to build on yesterday small gain and break the 7206 level that has been resistance this week. If they do then we have the top of the 10 day Bianca channel at 7216 as resistance, with the 20 day at 7263. Between them we have R3 at 7236 and the 10 day Raff at 7240. For today I have gone for some initial bull to try and pop above the 7206 level, but looking at trying shorts at 7215 and 7236, albeit they are risky ones off the daily channels. Interestingly, with yesterday being fairly flat for most of the day, and then just a small rise towards the end, the 2 hour chart has gone bearish now, with resistance at 7194, so whilst I am thinking we will get a rise to 7206+, I am also have expecting a drop down. Tricky one today to call to be honest! Gold has put in a decent rise over this week, now testing the 1180 level, so we may well see some profit being taken from equity longs and moved into gold if that continues to rise.

Below the 7180 level we have 7175 and 7130 as the 2 Bianca channels, with more major support at the 7110 level. There is still a chance that we drop back to the 25ema on the daily at 7036 for a decent swing long entry area. The daily RSI is still at 81 (remaining overbought still).

So for today, cautiously bullish off the 7180/7175 level holds, otherwise change stance for a run down to 7110.