17th June 2019
On Friday the FTSE 100 slipped back 22.79 points to close at 7,345.78, after a day of subdued trading, while the FTSE 250 ended 54.03 points lower to 19,118.34.
Oil prices ended the week lower despite a rally on Thursday following a suspected attack on two tankers in the Gulf of Oman. Brent crude surged 4.5pc to almost $63 a barrel – its biggest jump in five months – after the incident close to the Strait of Hormuz, a key transport artery in the Middle East, before falling back. On Friday Brent was up 0.2pc at $61.43 a barrel, down almost 3% this week and heading for a fourth weekly decline.
The incident led to concerns that the energy industry could become embroiled in rising geopolitical tensions between the US and Iran. The US blamed Iran for the suspected attacks but Tehran has denied the allegation. China has called on all sides to exercise restraint following the incident. Nobody wanted to see war in the Gulf and China hoped all sides could resolve differences through dialogue, a spokesman for China’s foreign ministry said.
Saudi Arabia’s crown prince blamed Iran for last week’s attacks on tankers near the Strait of Hormuz, adding to accusations that are stoking tensions in a region supplying a third of the world’s oil. There’s “no doubt” Iran was responsible for attacks on two oil tankers leaving the Persian Gulf last week, and the U.S. will guarantee safe commercial navigation going forward with its partners, Secretary of State Michael Pompeo said.
Trade Deal
Commerce Secretary Wilbur Ross downplayed the prospect of a major trade deal emerging from a possible meeting between President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit in Osaka, Japan, this month. That’s after Trump said Friday that “it doesn’t matter” if he gets a meeting with Xi at the G-20. “If he shows up, good,” Trump told Fox News. “If he doesn’t — in the meantime, we’re taking in billions of dollars a month. Eventually, they’re going to make a deal, because they’re going to have to.” However, Trump also reportedly delayed a speech by his vice president criticizing China’s human-rights record to avoid upsetting Beijing ahead of potential talks.
Awaiting the Fed
Chairman Jerome Powell’s frequent assurance that sustaining the U.S. economic expansion is the Federal Reserve’s “overarching’’ goal is opening the door to potentially aggressive interest-rate cuts. The timing, size and whether such moves are indeed in his plans may become clearer when Powell and his colleagues meet on Tuesday and Wednesday in Washington. Meanwhile, former Fed Vice Chairman Stanley Fischer predicted President Donald Trump won’t renominate Powell for another term as chairman if re-elected, undercutting the Fed’s autonomy.
FTSE 100 Trading Signals, Forecast and Prediction
For today I am looking at two main resistance areas, at 7390 and 7420, and feel that shorts off these levels are worth a go. There is however initial resistance on the 2 hour chart from the Hull moving average at 7376 that the bulls will need to jump first thing, but generally the futures prices have continued the rise since midday on Friday. The daily chart still looks bullish and has support down at 7311 for the moment, so if the bears were to break below this then it would change the picture to a more bearish one. For the moment the trend remains up.
Initial support today is at the 7350 area where we have a fair few supports, including the daily pivot, the 200ema on the 30min, and a positive coral line. We may well see an initial dip back to this area before a bit of bull Monday kicks in. Should the bulls break above the 7420 resistance level then we are looking at a potential rise to 7470 and 7529 where we have daily resistance and also the top of the 20 day Raff channel. I don’t think we will see that latter resistance level today though!
The S&P has a rise towards 2910 on the cards still, and has also fought back from Frdays low at 2879. In further support for the bulls, the price has crossed the daily coral resistance line at 2890. 2910 looks fairly solid resistance though.
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