Technical analysis for FTSE 100 for 7th January 2025
Nice start to the month/year yesterday with good level to level action and reactions at the key levels. We may well be on course for a bear Tuesday today and the bulls may struggle to break above the 8220 area today where we have the daily pivot for today, along with the red 30m coral at 8210.
Construction PMI is out at 0930 expected to show a contraction from last month, and then JOLTS US jobs news at 1500.
Initially today I am thinking that we may well see a slide down to the 8160 support area. This is S2 and also the key fib for today, so I would like to see this hold for a bounce as a break of this would likely then test the 200ema on the daily at 8140.
The bulls failure to push past the 8250 level again doesn't bode well for the most optimistic of months ahead either.... The 2h chart also remains bearish with the Hull providing resistance at the 8245 level still.
Should it move below 8140 then 8123 is S3, but the bears would likely be aiming for the 8100 round number, with that also acting as support between Christmas and the New Year. I am not expecting it to get that low and as mentioned would like to see the 8160 area hold today.
On the flip side, if the bulls were to break above the 8220 level then 8250 being yesterdays high is resistance above that, with 8268 above. 8277 is also R2 though that could be a big ask today given that it looks more pessimistic to start with.
Meanwhile, Britain’s borrowing costs surged close to their highest level in more than a quarter of a century on Monday. The yield on 30-year UK bonds – known as gilts – rose by as much as four basis points to 5.19pc on Monday, close to its highest point since 1998. The jump in market prices means Ms Reeves is expected to be the first chancellor since Gordon Brown to oversee a gilt auction with yields over 5pc.
If the bulls can defend any dips today and ideally get a close above the 25ema on the daily again, which sits at 8194, then we could see a bit more bullishness lock in later this week. As mentioned yesterday it's still in theory "buy the dips"....
So look for 8220 and 8277 as resistance, 8160 as support.
Good luck today.
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