5th November 2018
On Friday the FTSE failed to break the 7200 barrier and get the 7205 resistance level, dropping from 7195 instead to a session low at 7080 and the support area. That is still in play for today and a break of 7080 sees 7050. With the weaker session on Friday the 2 hour chart has gone bearish with resistance at 7166 for today. U.S. stocks wavered Friday amid concern over whether the U.S. and China can mend their trade tensions.
A strong U.S. jobs report helped push Treasuries down, with the 10-year yield rising the most in a month to 3.21 percent. The dollar gained, particularly against the yen, oil dropped and gold was flat. Tuesday’s U.S. midterm elections are likely to dominate attention, with some warning that the widely expected outcome of a divided Congress may not be fully priced in.
Chinese President Xi Jinping will be in the spotlight when he delivers the key address Monday at the opening of the China International Import Expoin Shanghai after his U.S. counterpart floated the possibility of a trade deal. Investors will be hungry for any sort of details after U.S. President Donald Trump hinted at the possibility of a deal with China at a planned meeting between the two world leaders at the Group of 20 summit in Argentina Nov. 30 to Dec. 1. China is under pressure from Trump and elsewhere to wind back its $423 billion goods trade surplus with the world, and Xi has already pledged that the country will import $24 trillion dollars of goods from abroad over the next decade and a half.
The Federal Reserve meeting is the main event on the economic calendar this week, but economists don’t expect any surprises. They’ll be watching on Thursday — pushed back a day because of the midterm elections — for any signs market volatility is giving officials pause as they approach a probable hike next month.
FTSE 100 Trading Signals, Forecast and Prediction
For today I am thinking that we may see a weakly bullish day and a rise towards the resistance levels at 7125 and 7165. The proviso is that 7075 support area holds any initial weakness. I am still watching for the 7050 support level though, but not sure that it will get that low today. The break of 7080 on Friday does show that the bears are still lurking in the back ground though so bear that in mind. Below 7050 then 7010 is the next level to look for and possible swing long territory.
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