Lacklustre day from the bulls yesterday with the FTSE 100 dropping down to the 7400 support level and then not really doing an awful lot. Even the divi hunter driven rise at the end of the day only managed to get it up to 7410. Overnight however the 7400 level has held as support, despite weakness in Australasia, following soft Chinese Caixin Services PMI.
Today is "Super Thursday" when we have the BoE and a rate announcement. Will Carney be more hawkish? Rates are largely expected to remain on hold, despite calls from a former governor yesterday to raise rates. The bigger news will be tomorrow with the NFP jobs data, forecasted at 180,000.
FTSE 100 outlook and prediction
For today I am looking at support at the 7360 level, and resistance at 7460. That's quite a range really, so we may not see both of those levels, however with the BoE today then it may well be a little bit more volatile. Also ahead of NFP tomorrow - the forecast is that US employers added 180k of jobs in July and a beat of that should help the bulls. They were pretty weak yesterday with the initial drop down and then a lacklustre day staying around the 7400 level while they wait and see.
I am thinking that we will get an initial drop again today down towards that support level and then a bit of a rebound from there. If the bears break the 7360 area then we are looking at a decline towards the 7334 fib level and maybe lower so they will be keen to hang on to that support. At the moment the 2hr coral line is supporting things at 7400, however with that weakness yesterday the moving averages have gone bearish with 7404 resistance. So not really much in it at the moment.
With NFP tomorrow, and a large 40 point divi next week I don't think we will see a major sell off just yet unless there is something unexpected. However, once that divi is out the way then the picture may well change.
