25th January 2019
The euro faced a rocky day of trading, swinging between $1.304, its lowest level this year, and $1.391. It was affected by news of European monetary policy as the European Central Bank (ECB) decided to keep interest rates at historically low levels of zero, with negative rates for deposits held at the Bank. It said that rates would remain at this level until at least the summer.
In a press conference after the announcement, ECB president Mario Draghi said that risks to the eurozone economy remain. He said the area was affected by uncertainties “in particular relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment”.
The FTSE 100 closed at 6,818.95, down by 0.35pc. This is the third consecutive day of falls, and the worst close in two and a half weeks. Chancellor of the Exchequer Philip Hammond warned that a second referendum could be a “Pyrrhic victory” for the UK. Airbus added pressure on the government to deliver a deal after announcing that it would pull part of its operations out of the UK if it left the European Union without a deal.
Sterling continued to trade above the $1.30 mark. It is now trading at around $1.3027, down from earlier highs of $1.3094.
U.S. stocks whipsawed Thursday, as a rally in semiconductor shares tempered concern that the U.S. and China may be further from a trade resolution than investors had hoped. Treasury bonds remained a refuge and the dollar resumed its rally. The Dow Jones and S&P 500 Index swung between gains and losses most of the day after Secretary of Commerce Wilbur Ross said the world’s two biggest economies remain far apart on trade, while still acknowledging that there is a “fair chance” of a deal. White House economic adviser Lawrence Kudlow later said President Donald Trump is optimistic about trade talks and that the January jobs report will be up a significant amount.
Commerce Secretary Wilbur Ross said the U.S. and China are eager to end their trade war, but the outcome will hinge on whether Beijing will deepen economic reforms and further open up its markets. Ross said negotiators are making progress on “easier” issues like how much of certain American products the Chinese will agree to buy, such as soybeans and liquefied natural gas. Earlier in the day, Ross downplayed expectations for an end to the U.S.-China trade war, saying the world’s two largest economies are a long way from resolving their differences. “We’re miles and miles from getting a resolution,” he said in an interview on CNBC. “Trade is very complicated. There are lots and lots of issues.”
FTSE 100 Trading Signals, Forecast and Prediction
The bulls managed a decent bounce off the first test of the 6800 level yesterday and we saw a close at 6818, where now also have the 30min coral showing as support to start with today. Overnight Asia has risen and the ASX200 held its 2 hour support at 5868 to rise back above 5900. A such, we might see a bit of a rise on the FTSE 100 today, Brexit or news notwithstanding. If the 6800 to 6820 support area holds then we should see a rise towards the 6865 level, where we have the fib and 200ema, with 6905 above this. If we were to see this today then we might well see a stutter here so watch this level closely if seen.
The bulls will be keen to push above the 6910 level as that opens up 6950+ and shakes off the immediate threat of a break below the 6800 level.
If 6800 were to break then the bears are targeting a drop down towards 6660 and 6536 which I mentioned yesterday as starting to show on one of the calculations.
The Dax and S&P have bullish 2 hour charts for today with support at 11118 and 2641 respectively, though the FTSE is still bearish. If we were to get some strength today then we could start to see support form on our 2 hour chart at the 6835 level but thats not confirmed as yet.
So, Friday coming up so a bit more risk off but the strength in other markets might filter through to the FTSE100 today, if they can defend the 6800 level. Watching for a rise towards the 6865 resistance level initially.
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