The S&P dropped sharply off its 2850 high to 2825, and cable continues to rise as the dollar weakened, now around the 1.42 area. That certainly didn't help the FTSE 100 bulls who have failed to break the 7740 level all week and were enable to stop the bears yesterday. Despite the drop in the USD, the S&P remains pretty strong rebounding to 2835 and still well up for the year so far. It was the FTSE 100 that was the biggest casualty, seeing 7620 out of hours last night, far off the recent 7795 high.
Cable continues to rise and thus weighs on the FTSE 100 which is behaving as the weakest of the markets that I watch. The 140 level was resistance but it has pushed through that and actually looks set too push higher still. The FTSE 100 has set up a bearish daily candle after the fall yesterday and now its broken 7690, 7600 is looking very likely. With S1 and the daily coral line at 7598, it is worth a risky long here again, as there is still strength in other indices.
We have the ECB rate announcement later today at 12:45, as well as some US jobs data at 13:30. With regard to the ECB, traders will be looking for for further clues on its appetite for rolling back stimulus, and its officials’ thoughts on a strengthening currency.
We are still testing the bottom of the Raff channels at 7610/7620, and trying to push below, so it will be interesting to see if the 7600 area holds if its tested later today. So far in 2018, most dips have been bought up, however, risk appetite might have declined a bit with data showing slowing consumer spending and static wage growth, despite record high employment.
Resistance wise, the bulls will be keen to get past the daily pivot at 7669, with the 7700 level of note above this where we have the 200ema on the 30min chart. The 2 hour chart went bearish at 7720 yesterday, and now has coral resistance at 7712. So the bulls have a bit of a mission on to get the FTSE 100 past this level and thinking about challenging the 7795 area again. It's all eyes on cable really to see if it drops back through despite being overbought across the time frames doesn't appear to want to!