The FTSE 100 managed a moderate rally during the day overall, closing up 0.33pc amid a broader burst of relief across European stocks after some sharp falls on Tuesday. The day was light on major Brexit news, and traders had little macro news to move on. Despite the initial drop off 7170 the bulls fought back but failed to break above 7200, meaning that the current daily resistance level of 7242 remains untested and in play still.
Overnight we spiked down on the news to the 7120 support level that we had pencilled in for yesterday and have subsequently bounced back. Lots of news bombs last night with regards to trade and with the US-China negotiations taking place today and tomorrow we may well see a few more. And therefore a few more whipsaw moves in the market. I have put my orders today quite wide as those levels seem to be showing the most promise and may well account for the swings. Having fought back from that 7120 level we are looking at opening pretty much where we closed last night.
We have R1 and the 200ema at 7176 to start with as resistance and then the fib level at 7191 above this. As mentioned above I am still mindful of that daily resistance at 7242 and in an ideal world we get a rise to there and then a drop down. Can the bulls push that high today, maybe helped by some progress on trade talk? The top of the 10 day Raff channel is also just above here and trending down which adds some weight to this area as resistance also. Thats slightly higher at 7260.
For the bears, they will be looking to break below that 7120 level. Shame it didn't tag that level in the day for the long though! Below 7120 then we have a key fib and S1 at 7096, and as this is just below the round number we may well see a reaction here if tested. The bulls will be keen to keep the price above the 7100 level. Should 7090 break though then it gets a bit bearish with 7005 likely again, then 6982 and 6945 looming into view.
So, expect a choppy two days coming up with these trade talks. Still looking at 7242 for decent resistance. On the news today we also have the ECB minutes and US inflation as the main movers.