NFP Friday | 7445 7395 support | 7496 7535 resistance | Slow rise up on the cards

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UK shares dropped Thursday, tracking a fall in global equity markets after minutes of the US Federal Reserve’s December meeting showed the central bank’s hawkish stance toward interest rate hikes as it looks to tame high inflation.

The FTSE 100 ended 0.9pc lower, with industrial and healthcare stocks being the top drags.

Global equities sold off after it emerged that US central bank policymakers said in their meeting last month that a “very tight” job market and unabated inflation might require the Fed to raise interest rates sooner than expected.

Meanwhile, U.S. futures and Asian stocks rose Friday as investor focus turned to upcoming data from the American labor market. Treasuries steadied after declining all week.

Shares climbed in Hong Kong and South Korea but slipped in Japan. S&P 500 futures saw modest gains. The U.S. benchmark closed little changed after a drop of almost 2% Wednesday that was sparked by Federal Reserve meeting minutes that suggested the central bank is ready to raise rates sooner and higher than previously expected. Ten-year Treasury yields were steady around 1.72%, set for their biggest weekly jump since 2020.

The dollar edged lower, while oil climbed to a seven-week high on supply constraints. The yen pared some of its overnight gains. Gold was little changed.
Bitcoin fell to its lowest level since September, dropping to nearly $41,000 at session lows.

FTSE 100 live outlook prediction analysis for 7th January 2022

Off we go for the first freaky Friday of the year with NFP news out at 13:30 this afternoon. This is likely to be good and also likely to lead to some bigger swings around then after the Fed talk the other day.

To start with today we have initial support at the 7445 level with the daily pivot and a green 30m coral here. The S&P also continues to flirt with the 4700 level and has a green 30m coral below this at 4691, so the bulls will be looking to hold these support areas first thing. Not much movement overnight either which suggests a bit of possible consolidation playing out ready for a push higher, especially on the S&P500.

If the bears were to break below the 7440 level first thing we will likely slide down to the S1, round number and key fib which are all around the 7400 level. I would like to see this level hold otherwise a break of that is likely to drop down to test that 7360 recent low and possibly lower.

The bulls on the other hand will be looking to break above the 7530 recent high as that then keeps the 10 day Raff channel heading up and a possible test of the 7598 R3 level in play, not that I am expecting it to get that high today. The bulls really need the support of the S&P bulls too though and a defence of the 4700 level.

For today I am looking at a rise towards the 7500 level at least initially before we see a bit of a pause there. The 7500 level looks fairly decent resistance to start with as we have R1, key fib and daily levels all here. If the NFP news helps the bulls though then a break above this later on is likely. If we do push up and the bulls end the week strongly then it bodes well for the usual January seasonality to play out, and that means more upside till mid month where upon a bit of weakness kicks in.

NFP is forecast to be 400k this time, compared to 210k previously, with the December unemployment rate dipping to 4.1% from 4.2% previously.

With NFP today and a Friday we may well see a bit more chop than usual so be a bit more cautious today. Good luck and have a great weekend.

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