Well the FTSE was certainly in its own little world yesterday as expected, though the lower support levels held for a few points from the long. However, the bulls never really got going, and indeed overnight we have dipped below that 7320 support level but climbed back. The US market forgot about their tax inspired climb on Friday, and retraced 50% of the rise for a low of 2634 on the S&P. Even Trump's market ramping "its going to be a big day" failed to get the bulls excited. Unless he meant the bears of course! Traditional safe-haven assets fell, with gold resuming its downward path after a jump on Friday and the yen slumping. West Texas oil fell below $58 a barrel. The pound erased gains after Brexit talks ended without a deal.
For today I have gone for a dip and rise scenario with the gap at 7280 being filled and a test of the fib support level at 7277. If this level holds then the bulls should be able to get us back above 7300 and a rise towards the fib level at 7375. If they can break this then we should be on for a rise during this week for a push to 7450+.
However, if the bears continue to attack, and manage a break of the 7280 level then we are looking at a decline towards 7230 and maybe lower. I mentioned 7100 yesterday which is the bottom of the 2017 range and could be tested. However, we are getting into the December "Santa Rally" period, though no one knows when it will start, if indeed it starts at all - it's not a guaranteed pattern.
Brexit continues to drive sterling, which in turn drives the FTSE 100 at the moment. Yesterday's decline in sterling after the initial rally helped the FTSE to climb off the 7325 support area.
The 30min chart has a bearish coral trend line resistance at 7340 to start with today, though the 25ema support is close at 7334. The open will be quite key in setting the tone for today. The 2 hour chart is still weak bull, with support at 7319 - a brave long here is worth a go but cut fast if it doesn't bounce and flip to short to target the fib level at 7277.