7170 resistance with 7192 above | 7130 support | 0.2% UK GDP | Trade ceasefire | Live trading chat room

US Payroll data beats | Bull Monday | Buy the dips | 7350 7380 7430 resistance | 7304 support | Trading analysis

12th February 2019

The FTSE 100 closed up 57.93 points at 7,129.11 boosted by sterling falling after below-expectations GDP figures were released for the last quarter of 2018. The economy grew by 0.2pc in the three months to December, its joint-weakest level since 2009, a year in which the UK was still in recession.

The economy’s momentum worsened throughout the year, and actually contracted by 0.4pc in December. Growth prospects hinge on the outcome of Brexit negotiations, with the Bank of England currently predicting 1.2pc for 2019. The release from the Office for National Statistics also included an update on UK trade, showing the trade deficit had worsened to services) widened £0.9 billion to £10.4 billion in the three months to December 2018, due mainly to a £1.5 billion rise in goods imports. services) widened by £900m to £10.4bn in the three months to December, led by a rise in imported goods.

Immediately after the announcement sterling fell from $1.2931 to $1.2895. After initial recovery, it fell further and was trading around $1.2858 later on.

Despite uncertainty in the US over a potential second federal shutdown, and the impending end of a trade ceasefire with China, the dollar strengthened for the eighth day in a row. American indices stayed relatively constant, with the Dow Jones down slightly by 18.54 points to 25,087.79 but the S&P 500 up 3.16 points to 2,711.04.

Markets in Europe had a positive day, with major indices including the DAX, IBEX and CAC all finishing up.

The CSI 300 of Shaghai- and Shenzen-listed stocks finished up after a week of closures for Chinese New Year, despite uncertainty on trade. Indices elsewhere in Asia were unsteady. The Nikkei was shut for a national holiday celebrating the founding of Japan.

Stocks Steady Ahead of Trade Talks
Asian equity markets traded mostly higher amid cautious optimism regarding US-China trade talks and hopes of averting a government shutdown. The dollar strengthened for an eighth day, and 10-year Treasuries fell. Futures were higher in Japan and Australia, while contracts in China and Hong Kong pointed lower. The S&P 500 Index finished little changed after drifting most of the session. Investors are weighing the prospects for success of this week’s high-level U.S.-China trade talks ahead of a March 1 deadline for higher tariffs, while mulling the likelihood of a U.S. recession and its impact on earnings as reporting season rolls on. The threat of a shutdown in Washington also looms, with political tensions flaring again between Congress and the president. Elsewhere, West Texas Intermediate crude slipped to its lowest close in two weeks, while gold headed for its first drop in three sessions.



FTSE 100 Trading Signals, Forecast and Prediction

7130 is looking like an interesting support level for today. We closed at this level yesterday and it is also showing as support on the 2 hour chart, which once again has gone bullish for the moment. The daily chart remains bullish with support at 6981 (steadily rising). If we get a dip down and a bit of a gap close to the 7130 level then I am thinking that a long is worth taking here.

FTSE 100 Trading Signals, Forecast and Prediction
FTSE 100 Trading Signals, Forecast and Prediction

Below 7130 we have support at the pivot at 7116, and then yesterdays low at 7088. Below that then 7072 id the fib level. If the bears were to break below this then 7048 which was the support level for yesterday is still in play. A break of this and then we look a bit more bearish – that daily support is on the radar at 6981.

On the bullish side, if the bulls can break the initial resistance at 7150 to start with this morning (we have the 2 hour coral as resistance at this level) then I am looking at a rise to the 7170 level where we have the key fib for today. The bulls maintain the momentum and a rise towards the 7200 level looks likely, though the daily resistance is just below at 7192. As mentioned yesterday the bulls will be keen to get 7200 chalked up on the board soon, having failed to reach that last week. Above this then 7313 is also showing as a resistance level.

Half expecting a bit of a flat’ish day today and looking at the 7172 resistance and 7130 support level, at least to start with. The S&P has bounced well off the 2 hour support at 2705 yesterday evening, and looking like a rise towards the 2740 area is on the cards.

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