6970 support for a possible rise and dip today with 7050 resistance | Trading analysis and plans

6970 support for a possible rise and dip today with 7050 resistance | Trading analysis and plans

23rd October 2018

The FTSE 100’s mining heavyweights swerved a fourth day of decline yesterday after being lifted by hopes of Beijing unveiling more stimulus to shore up China’s stuttering economy. Later China did announce fresh measures to ease the funding strains of private companies, as top officials seek to restore confidence in the world’s second-largest economy. The State Council announced it would support bond financing by private firms on Monday, and said the central bank will provide funding to facilitate this. The People’s Bank of China soon after announced a plan to support such issuance, without providing any details of the size of the plan, or when it would begin. In a separate statement, the central bank also announced a 150 billion-yuan ($22 billion) increase in its relending and rediscounting quota. These are tools that allow the central bank to supply financial institutions with money to lend. The quota was also raised by 150 billion yuan in June.


FTSE 100 Trading Signals, Forecast and Prediction

For today we are starting bang on the key support level at 6999 and as such we may see a kick up at the bell. If we do then a rise towards the key resistance cluster at 7050 looks possible, as we try for a gap close as well (retrace to yesterdays closing price). There are several key resistance levels at the 7048 to 7055 area. The Asian session was pretty bearish Tuesday, with the ASX200 declining as the gloss from the miners Monday faded, and as such we may well also go lower today.

If the bears break the 6999 level then we are looking at next support at 6970, though to be honest, a break of 7000 is likely to put the cat amongst the pigeons and spook the bulls to staying on the sidelines and as such further declines look likely, most likely towards 6900.

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