9th November 2018
Overnight we have revisited the 7105 level. Yesterday strong corporate earnings helped the FTSE 100 outperform its struggling rivals in the US and Europe. London’s blue-chip index inched up 0.2pc overall while US stocks were largely flat ahead of the FOMC rate decision.
The Federal Reserve left interest rates unchanged and stayed on course to hike in December as strong economic growth, higher tariffs and rising wages look set to spur inflation. The central bank said “economic activity has been rising at a strong rate” and job gains “have been strong,” acknowledging a drop in the unemployment rate, while repeating its outlook for “further gradual” rate increases in its statement Thursday. In one of the only tweaks to the statement, the FOMC said growth in business fixed investment has “moderated from its rapid pace earlier in the year,” compared with the previous “grown strongly.” Third-quarter data showed non-residential investment increased at the slowest pace in almost two years.
We have UK GDP data out at 09:30, forecast to be 1.5% versus 1.2% previously. This is an indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish.
FTSE 100 Trading Signals, Forecast and Prediction
For today I am thinking that we might see a bit of a flat to slightly bullish day. Its Friday so probably going to be weird anyway! Initially I am looking at the 30min coral and daily pivot area as resistance at the 7138 area and if we get an early rise to here we may then see a turn down towards the 7088 fib level and also S2 at 7081.
As an aside, just ordered this book “Treasure Islands” following a recommendation from a member and looks a good read.
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