Support 7162 7144 7121 7084 7033
Resistance 7184 7197 7227 7234 7277 7306
Well the inauguration all went smoothly after all, and the first few hours of the Trump presidency saw work to dismantle Obamacare and the dollar weaken, which took the FTSE 100 down to just above the 7175 support area that we had on Friday. Bounced a little bit there to end up around 7190 ahead of the weekend. However, we have dropped back a bit during the Asia session, with the dollar weakening a bit further.
As the GBP/USD rate climbs (its up to 12442 now) the FTSE will dip back a bit. Interestingly though the FTSE 100 is now right on the 25ema on the daily chart at 7165, which is "usually" a good spot to enter a swing trade. That said, it could do anything early this week while things settle down, with support here at 7162, then 7144 and 7080. If the bulls are going to take back control then they need it back above 7234.
FTSE 100 Outlook and Prediction
To start with, I am expecting Friday's weakness to continue, especially as we have broken 7175 out of hours. This is despite the fact that we are sitting bang on the 7162 25ema daily support area. We have the bottom of the 10 day bianca at 7144, and the 10 day raff at 7121, so may even see both of these levels today, especially if gold continues to rise, the dollar continues to weaken and the general sentiment remain bearish.
In my 2017 outlook I had a dip down during the first quarter of the year to 6500, so have still got that in the back of my mind. If we dip down to 7150 today, then it is worth a small tentative long there for any bounce, following the ASX200 pattern for today which had a dip and then a slow bounce.
Generally the picture still looks bearish, with the 2 hour chart surrendering its slightly bullish stance from Friday and now bearish again, with resistance at 7184. The bulls will need to break this, then 7234 to enable any sort of upwards trajectory to stick, but they definitely have the odds against them currently. Despite that, I have plotted a bit of a dead cat bounce on the prediction chart from the 7150 level so we will see if that plays out, otherwise I am thinking a trip to 7085 is on the cards if 7144 breaks. If it does, then it's worth flipping to short.
Certainly interesting times, though despite the rhetoric I think that UK/US relations will remain strong.