The bulls managed to break the 7412 level yesterday and that was worth hopping on the long at 7421 as we got a rise to 7470. Closing there was ideal, as the FTSE 100 fell sharply as the UK Brexit divorce bill figure was "leaked". That caused a spike in the pound and a drop in the FTSE, which was then compounded by North Korea firing another ballistic missile towards Japan. However, none of that worried the US which saw the S&P climb sharply to 2625 as the tax reform headed for a marathon debate this week after the budget committee voted along party lines to send the Republican plan to the floor.
As we saw last night the FTSE 100 is still strongly correlated to cable at the moment, with the rise in the pound dropping the FTSE after the bell. I expect that will continue for a while yet. Since the drop on the Brexit divorce bill news last night, the FTSE 100 has held steady at the 7430 level.
The 2 hour chart is now bullish again, with that rise yesterday, and is showing support at 7418 so a dip down initially this morning would be a good long entry at this area. The bulls couldn't make a break of the 7466 resistance level really stick, though the news was what scuppered the plan for them. As such, if they have another go today then a rise towards the 7520 resistance area is likely.
We also have a key fib level at 7487 which is also just above R1, so may see a possible stutter here. There is also the daily coral at the level at 7480, as well as the top of the Raff channels - so it starts to get a bit toppy there.
However, we usually get a decently bullish December, major news notwithstanding, so we may see some end of month buying coming in. Can the bulls get it back up to the 7600 recent highs though?
If not and the bears regain control with a break down through 7420, then we are still looking at 7360 and 7330 levels as the key supports. Outside chance of 7300 still.