That was a fairly slow session yesterday, but the key thing was that the bulls defended the 7215 area, and we have had a small rise from it. They will need to break 7295 this morning if they are going to push higher, but if that support holds then we could well be on for a retest of the 7355 level, and maybe a move higher.
Of course, we have Donald Trump's inauguration tomorrow, so it will be interesting to see how the markets react tomorrow and next week. Yesterday's data showed rises in inflation in the UK, US and Eurozone amid an upbeat speech from Janet Yellen about the economic recovery. Also helped the gold short which ran well from 1215 to target at 1206 (and a little bit further) yesterday evening.
FTSE 100 Outlook and Prediction
This morning we have initial resistance at the 7260 area where we have the 100 hull moving average on the 2 hour, and then we have a red coral resistance line just above this at 7295. If the bulls can break this then 7315, 7358 and 7375 are all possible upside targets. On the support side, I am thinking that we will get a small dip down from the 7260 area to start with down to the pivot at 7241 and then we may well see a bounce.
As mentioned above, the bulls defended the 7215 area well so far, but we could do with pulling away from this area if the bulls are going to take charge again. We meandered a bit yesterday. Gold has dropped back to the 1200 area, so we could see a few brave bulls starting to appear in indices if gold weakens further.
Below the pivot then we have the 10 day bianca channel at 7216 which would also tee up a double bottom bounce from this area. Below this, then 7175 is decent daily support as we have the 25ema on the daily around here also (7168 today) which could well be a decent swing long entry area. Certainly worth a go anyway.
Certainly quite a few areas being thrown up as support and resistance after the recent moves, but if 7175 holds as support for the short term then we might get another leg up to extend the Trump rally a bit further. The daily RSI(10) is down at 62 now, so the overbought conditions from last week have eased off now.
