25th October 2018
The bulls failed to break 7050 during the session and that started a very steep fall which saw the 6894 support level at 8:30pm, as US markets gave up their 2018 gains and a sell off follow though in Asia today followed. 6894 area has held again though. A break of this sees a fall to 6650 area.
Asian markets have tanked after a punishing session on Wall Street that saw major US indices wipe out all their 2018 gains. MSCI’s broadest index of Asia-Pacific shares outside Japan has fallen more than 18.5 percent so far this year after skidding almost 2 percent on Thursday. Japan’s Nikkei tumbled 3.3 percent to a six-month trough while Australian shares hit a more than one-year low. Tokyo’s Topix index tumbled 3 percent, evaporating more than $155 billion in market value.
Chinese shares were in the red too with the blue-chip SSE Composite index plummeting 2.5 percent as fresh market-support measures by the Chinese government failed to ease investor worries about high leverage and the Sino-U.S. trade war. Hong Kong’s Hang Seng index sank 2.2 percent. “The market environment is tough,” Makoto Sengoku, market analyst at Tokai Tokyo Research Institute said, pointing to the sharp drops in US stocks. “Sentiment has worsened due to a mixture of various negative pieces of news,” he said.
Sentiment has been tested in October, with stocks poised for their worst month in more than six years as the effects of trade tensions, geopolitics and rising Federal Reserve interest rates begin to bite. Investors remain apprehensive as a flood of earnings, while mostly stellar, have come with warnings about the future impact of tariffs and rising costs.
FTSE 100 Trading Signals, Forecast and Prediction
There is decent resistance at the 6955 area with the daily pivot and the 30min coral showing red at this level. The 2 hour chart is still bearish (as you could probably have guessed!) and 6983 is the current hull moving average, should the bulls reach this level then a drop down from this is possible, though 6950 looks better for an entry
I can see an attempt at a defence of the 6894 support level again, though having tested that last night and again this morning it will probably break on the third test, if that happens later today.
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