FTSE 100 live outlook prediction analysis for 26th August 2020
Here’s a recap of Tuesday…
- European equity markets got off to a bullish start in early trading but slipped as the day went on.
- The FTSE 100 closed 1.11pc lower at 6,037.01 while the FTSE 250 shed 0.61pc to 17,577.89.
- Mining stocks, like Rio Tinto, BHP Group and Anglo American put pressure on the benchmark index as well as BP and Royal Dutch Shell.
- German investors were cheered by better-than-expected economic data and another rise in the closely-watched Ifo business sentiment indicator.
The frosty relationship between China and the US has thawed a little as the countries had constructive trade talks. The mildly positive news was one of the reasons behind the strong start to the session, but the impact then largely wore off once the FTSE 100 had tested the 6165 level.
Another Record
U.S. equities rose to all-time highs for a third day running, with investors counting on the Federal Reserve to stay accommodative as the economy recovers from the coronavirus pandemic. The S&P 500 and the Nasdaq Composite notched fresh highs, with Facebook rallying after unveiling a series of tools designed to expand shopping on its social media platforms. Treasury yields increased and the dollar weakened. S&P 500 futures opened little changed. Stocks in Asia were set for a more muted open, with futures down in Japan and Australia and flat in Hong Kong. New Zealand equities will resume Wednesday after a cyber attack halted trading late Tuesday. Oil held gains as traders eyed Tropical Storm Laura, which is expected to strengthen into a hurricane before making landfall later this week. U.S. gasoline futures rose to the highest level since March on concern over possible fuel shortages.
Trade Talk Progress
The U.S. and China reaffirmed their commitment to the phase-one trade deal in a biannual review, demonstrating a willingness to cooperate even as tensions rise over issues ranging from data security to democracy in Hong Kong. The two countries discussed steps China has taken, including ensuring greater protection for intellectual property rights and removing impediments to American companies in financial services and agriculture, the U.S. Trade Representative said. Both sides agreed to create conditions to push the deal forward, according to China’s Ministry of Commerce. Resolving the trade war between the U.S. and China has emerged as a rare area of cooperation as the relationship sours on a number of other fronts. Yet Beijing is far behind where it needs to be to meet its promises to increase purchases of agricultural, energy and manufactured goods from the U.S.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
A rally in global stocks stalled within a whisker of February’s all-time high as investors mulled the pace of the recent gains and expectations for loose monetary policy. Treasuries edged lower.
Shares slipped in Tokyo, Hong Kong and Shanghai on low volumes, while Australian equities underperformed. S&P 500 futures were steady after both the benchmark and the Nasdaq Composite climbed to fresh records, helped by gains in Facebook Inc. Crude oil traded near the highest in five months as Hurricane Laura bore down on key refining facilities on the U.S. Gulf Coast. The dollar edged up.
The bulls managed to push past the 6140 resistance level yesterday morning but stalled at 6176, failing to reach the 6200 area where we had the top of the Raff channel. As such that has moved down to 6161 for today so should we see a rally to this area then the bears may well appear here again. That may also tie in with any upside on the S&P towards the 3465 resistance level where we have the key fib and the R2 level for today.
That said, initially we have resistance at the 6063 level from the 2 hour chart, which is bearish to start with following that drop yesterday. The bulls have put up a bit of a defence though so far, and we are just hugging the 2 hour coral line (still green and trending up) so its still, for the moment “buy the dips”. The S&P defended the 3425 level and does look like it may well push higher again today ahead of the Jackson Hole symposium. 3437 and 3416 being the main supports on that today. Cable has dropped off a bit as well, which will help the FTSE bulls today if that continues.
We have a cluster of resistance at the 6065 level to stat with today, as apart from the 2 hr, we also have the 200ema on the 30min and the 30min coral here. As such I am expecting a bit of a dip down initially, probably from this level.
The first support of note is 6027 from the key fib, then the 6000 round number, then a more significant support at S1 5986. If we do get down to this level then a long here looks to be worth a go, especially if the SP bulls appear too.
Should the bears really start to go for it then a bigger slide may well get under way before the end of year rally ahead of the US election. A break of 5900 would likely mean a slide down to 5800 or lower. The bulls however will be keen to keep the price above the 6000 level.
For today though, looking at support at 6027 then 5985. Resistance levels of note today are 6065, 6119 then 6161. Good luck today.
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