BoE Leaves rate at 0.25% | Decent drop off 7444 | 7385 support

17th March 2017

Good morning. Well the Fed driven rally continued first thing yesterday and we managed to rise to 7444 where it ground to a halt. Fortunately the short order had taken at 7441 so that was a nice drop down to the 7410 area for that one. Its looking like 7444 is going to be a short term high as the bulls have failed to push back to anywhere near that level so far and in fact we are back below the 10 day Bianca, resistance on that at 7424. The 20 day Bianca channel is slightly higher at 7454. We may well see a bit of bearishness creep in for the next couple of sessions. The FTSE closed yesterday at a new all time high. Just need some newspaper headlines now with “is now the time to buy shares?” to mark the short term high.

FTSE 100 Outlook and Prediction

For today I am thinking that we will have a dip and rise day. The bears will be feeling powerful after that drop yesterday from 7444, however the bulls have defended the 7400 level as well. And crucially for them, we have held above it overnight. As such, any dip below, to the fairly key looking support at X is likely to get defended and we could well see a rise from here. X is also the 61.8% fib line of the move from the pre Fed low, to the post Fed high.

If this key support level were to break then its looking like the next support will be around X, and if it gets weak then a trip to X is on the cards.

Assuming however that the bulls defend that X area, then we could be on for a rise back to the initial resistance at X where we have the daily pivot. Above this then X is the recent high and also R1 for today. Above this then the top of the 20 day Bianca channel at X might be tested and if the bears appear again could be another decent short entry for another push lower. I.e. a brief rise above the 7444 level and then back down if the bulls cannot make it stick.

So, fairly simple plan for today really, looking at X for support and X for resistance.