13th May 2019
Friday saw most European stocks rebounded today as investors bet on China and the US ending their trade war, taking Asia’s lead. The FTSE 100 closed 0.06pc lower at 7,203.29 while the FTSE 250 was 0.42pc up at 19,366.80. Paris and Frankfurt closed higher, up 0.72pc to 12,059.83 and 0.27pc to 5,327.44, respectively.
US investors remained cautious, however, as stock on Wall Street were set to close lower. It will be the fifth consecutive day in the red if so, with the main indices on track for their biggest weekly fall this year. This week’s developments in the trade spat have “served as a wake-up call for market participants”, according to Rabobank. “Against a backdrop of slowing economic growth and an anticipated US recession and the financial market risks highlighted above, the current string of events could easily aggravate the downward trajectory,” it warned.
Is the jobs miracle strong enough to survive the intense political chaos which engulfed Westminster in March? We find out tomorrow with employment data from the Office for National Statistics. Economists think the answer is ‘Yes’. They believe the labour market added 141,000 jobs in the three months to March. That is down a touch on the unexpectedly high 179,000 in the three months to February, but still a very respectable pace of job creation. It keeps the unemployment rate at its 45-year low of 3.9pc.
At the same time wages are thought to have risen by 3.4pc on the year, slower than 3.5pc in the previous month but still firmly above inflation which is running at 1.9pc. Meanwhile, the German economy is set to return to growth. GDP is thought to have grown by 0.4pc in the first quarter, recovering from stagnation in the final three months of 2018 and a fall of 0.2pc in the quarter before that. It is due on Wednesday alongside eurozone GDP which is set to hold steady at 0.4pc.
FTSE 100 Trading Signals, Forecast and Prediction
For today we may follow the Australian lead and have a fairly flat day. Asian stocks and US equity futures begin the week negative as focus remains on the US-China trade tensions. Overnight we have dropped off the high seen at the end of Friday’s session at the 7282 level, and are looking at an open around the 7220 level. This is on S1, so we may see a bit of an initial kick up towards the 30min resistance at the 7235 level. If the bears appear here then we will likely see a drop down to the Friday low area at 7186, though we still have decent daily support at the 7180 level. Ergo a long here is worth a long if this area is seen again. A break of 7180 however starts to get things pretty bearish in the short term and a trip down to 7080 is likely. That said, there is S2 at 7154 and the 7160 cam break out level may well see some buying here, especially with a large dividend this week.
If the bulls do defend the 7180 area and we have another buy the dip session kick in, then we should see a rise towards the 7251 level where we have the daily pivot and the 200ema on the 30min. We are sitting below the 200ema on the daily also this morning, which sits at 7229. The four previous day candles have all seen a a close above this line, despite a session low below it. Maybe the same again today for a bit of bullish Monday from the lows.
There is still some nice daily resistance at the 7310 level, and it was a bit of a shame that the bulls couldn’t quite reach this area Friday. A rise through the 7251 level today and it remains on the cards in the short term, namely today/tomorrow, as resistance.
Additionally, the 7200 area is still showing as daily support for the moment, and I think this 7180/7200 area is still decent support. We also have a large 27 point dividend this week so maintaining a bullish bias for the start of the week (poor trade talk news notwithstanding) is probably sensible. The dividend will help underpin the bulls for the moment. With the drop off from Friday last thing, we have left a lot of gaps higher up on the charts – 7279 FTSE, 2886 SP, 12202 Dax – so we will probably get them filled soon.
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates