7170 to 7214 resistance zone in play | 7145 support initially with 7060 below | Possible rise towards 7280

Quadruple witching today but a rise towards 7614 is 7561 holds early | 7658 above | 7514 below

7th October 2019

  • US misses expectations for jobs added, but unemployment hits lowest level since 1969
  • FTSE grabs relief at end of painful week as stock markets welcome Bureau of Labor Statistics figures

Friday’s gains were actually fairly significant, with its best one-day result since last December. The 7083 long entry worked well, with a nice steady rise towards the 7157 resistance level late in the day. It was a bit of relief, a bit of pound support and, yes, maybe a bit of dead cat bounce. Nonetheless, it was the worst week for the index overall since August, and at several points looked like it would be a lot more than that. It seems fair to say sensitivities are still high, however.

China Narrows Scope

Chinese officials on recent visits to the U.S. have indicated the range of topics they’re willing to discuss as part of a potential trade deal has narrowed considerably, people familiar with the matter told Bloomberg. That’s hurt optimism that a broad agreement could be reached ahead of Vice Premier Liu He heading to the U.S. capital for high-level talks Thursday. Asia stocks mainly slipped overnight, with the region also faced with flaring violence in Hong Kong and apparently fruitless North Korea denuclearization talks at the weekend.

Brexit Breakthrough Fades

With just under four weeks to go until the deadline, prospects of a Brexit deal faded after talks between the two sides stalled and European leaders cast doubt on reaching an agreement in time. France and Ireland both signaled they want progress by Friday, while U.K. Prime Minister Boris Johnson sounds as defiant as ever. Accord to a Sunday Times report, Johnson wouldn’t leave Downing Street even if he was to lose a confidence vote, challenging the Queen to fire him instead. Here’s how U.K. markets could be impacted in each of the three current potential outcomes.

FTSE 100 Trading Signals, Forecast and Prediction

The move up on Friday was a decent rise towards the 7170/7200 resistance area and we have dropped back from the bottom of this zone on the futures prices already. The S&P500 hit the buffers at 2955 on Friday and the futures prices on that have also dropped back. There is a chance that we get some further upside on his towards the 2970 level after a pullback early this week. The top of the Raff 10 day channel is at this price. That could well tally with the FTSE seeing a rise towards the 7200 area before a drop back. Brexit shambles notwithstanding. Cable also has decent looking daily support still at the 12200 level so should we see a climb on that from there, then that would weigh on the FTSE 100.

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

For today we have initial support at the 7145 level where we have the daily pivot and the 30min coral, however lower down we have support at 7091 for a key fib but also S1 at 7108 just above this level. Should the bears take control today then a possible drop down to 7061 where have 2 hour support looks possible, should they break below the 7145 support level. The Australians had a decent bull Monday though so the downside may be limited today (famous last words) and I am thinking that a rise towards that 7185 area would play out much better in terms of the patterns.

If the bulls were to break above 7185 then 7204 is R1 and we also have daily resistance at 7214. Should the bulls take this much control then we also still have the daily chart resistance at the 7285 area where we have the 200ema, 25ema and coral. As such, should we see that 7280 area tested soon then a short here looks very viable. I don’t think we will be getting that high today though but may well do this week, especially if the S&P were to push up to 2970.

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