5350 holds overnight but may be retested today 3250 below that | 5515 5600 resistance | Banks axe divis

5350 holds overnight but may be retested today 3250 below that | 5515 5600 resistance | Banks axe divis

FTSE 100 live outlook prediction analysis for 2nd April 2020

  • FTSE 100 slumps further after second-worst quarter on record but 5350 support holds
  • Banks axe dividends and bonuses ​
  • European and Wall Street indices sink on first day of quarter
  • Trump tells Americans to prepare for a “very, very painful two weeks”, and warns death toll could hit 240,000
  • Activity gauges show onset of major manufacturing slowdown, as factories cut jobs and report falling demand

Stock markets tumbled Wednesday after Donald Trump warned of “a very, very painful two weeks” to come for the United States, whose coronavirus death toll has overtaken that of China. European equities fell hard, with London closing 4.28pc lower to 5,429.46 and the FTSE 250 falling 4.21pc to 14,464.74. Sentiment in Europe was also knocked by poor manufacturing survey data.

Orders and employment in America’s factories slumped at the fastest pace in 11 years during March as producers found themselves caught in a vice of disrupted supply and devastated demand. The Institute for Supply Management’s purchasing managers’ index’s headline activity reading remained higher than expected, falling to just 49.1, but sub-components including bookings and employment reached their lowest levels since the financial crisis in 2009. A reading below 50 indicates shrinking activity.

Keeping Secrets

China has concealed the extent of the coronavirus outbreak in the country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House, according to three U.S. officials.  The outbreak began in China’s Hubei province in late 2019, but the country has publicly reported only about 82,000 cases and 3,300 deaths, according to data compiled by Johns Hopkins University. That compares to more than 189,000 cases and more than 4,000 deaths in the U.S. When China eventually imposed a strict lockdown beyond those of less autocratic nations, there was considerable skepticism toward China’s reported numbers, both outside and within the country. The Chinese government has repeatedly revised its methodology for counting cases, and stacks of thousands of urns outside funeral homes in Hubei province have driven public doubt in Beijing’s reporting. Globally, cases topped 920,000, leaving more than 46,000 dead.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Stocks in Asia pared losses and U.S. equity futures rose as investors showed tentative signs of edging back into riskier assets while continuing to assess the economic impact of efforts to contain the coronavirus.

My gold long from 1574 yesterday is still running with the stop at breakeven still but we have dropped back a bit from the 1595 level overnight. The bulls will hopefully go for a push past 1600 this morning, especially if the indices continue to weaken.

For the FTSE today I am looking at initial resistance at the 5515 level where we have R1 and also the 2hr moving average (we dropped off this at 5680 the other day) so it will be the second test – worth taking but usually not as good as the first touch. If the bulls were to break above 5520 then a rise towards the 5600 level looks likely as we have the 2hr coral here for resistance. R2 is higher up still at 5663 so could also possibly be seen if it gets bullish today.

It was a good sign that the 5350 level has held overnight, and 2450 on the SP, as a break of 5350 will likely lead to a drop down towards 5250. That said, should we drop back down to that area and see a break then that is the target area for the next bounce level. Trying to guess the sentiment is a bit tricky but that 5350 support holding suggests that we should see an initial rise this morning. Gold dropping back from the overnight high would reinforce that.

So, looking for an initial pop up this morning and watching 5515 as initial resistance with 5600 above that. Support is once again at 5350, with 5260 below that. Good luck today.

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