A fall in the pound put some lift under the FTSE 100, which shook off a flat session in the closing minute as sterling slipped beneath $1.30 for the first time in a fortnight, easing internationally-exposed firms.
Concern about the terms of Britain’s exit from the European Union appeared to be continuing to weigh on the currency, which suffered a sharp drop earlier this week after newly-re-elected Prime Minister Boris Johnson reaffirmed his government would take a hard line on trade negotiations with the EU in the coming year. Notable equity movers were fairly limited, amid subdued reporting flows in the pre-holiday period.
FTSE 100 Outlook and Prediction
The final day of trading of the week and we are likely to see the start of a choppy pre Christmas session on Monday. As such, today is the last "proper" trading day imho. We also have option expiry so expect some volatility at 10:10 this morning, which usually lasts for 10 minutes or so. We had a decent rise from our 7535 support level yesterday, which the bears rebuffed as they tried to break it, for a decent rise to this 7575 area. If the daily pivot holds this morning at 7561 then we should see a rise towards the 7613 area where we have a key fib for today. If the bulls were able to break that then a rise towards the 7658 R3 level looks likely and the Santa Rally (helped by the election) has seen a decent bounce from that 7130 level. I still think we end the year strongly, and am looking at a test of the 7700 level early next week. That said, as its Friday we may well see some profit taking and caution ahead of the weekend and a stumble at that 7610 area. If we do then a dip back down to the pivot would likely play out. We also have 2 hour resistance at 7616 for now so we may well see stutter here.
Should the bears break the 7561 pivot early on then I am thinking that we will see a drop down to the fib level and 200ema on the 30min at 7514. As such a long here could well be worth a go. We still haven't tested the daily support which is now at 7375 and maybe we won't get that low prior to the festive break, but I am still favouring buying the dips. A dip to that 7513 area would be a good buy to hold for 7700 on Monday or Tuesday I am thinking but I don't think we will dip that low now.
So, not too much to say really, initial support at 7561, with 7514 below that. Resistance at 7614 to start with, with 7658 above that. Watch for option expiry, be slightly more cautious as its Friday and have a great weekend!