7370 support this morning with 7300 test looking likely | 7422 resistance | UK employment hits record high

7370 support this morning with 7300 test looking likely | 7422 resistance | UK employment hits record high

FTSE 100 live outlook prediction analysis for 18th February 2020

European shares sleepwalked their way to a record close on Monday, racking up modest gains against a backdrop of virtual silence. Investors resumed a push into equities, despite a lack of major economic news across Europe, and US traders taking the day off for a national holiday. The pan-European benchmark Stoxx 600 closed at 431.98, rising 0.34pc during the session.

Despite thin volumes, there were a few notable shifts: China’s CSI 300 index – a composite index of shares listed in the major financial centres of Shanghai and Shenzhen – rose 2.25pc. It has now recovered all the steep losses it made earlier this month, when markets in the coronavirus-hit country reopened after an extended break for the lunar new year.

The FTSE 100 ended the day up 0.33pc, staying broadly in line with its European peers as a slight softening in the pound eased pressure on international earners. Sterling fizzled slightly, losing some of the momentum it gained at the end of last week on hopes that Rishi Sunak, newly appointed Chancellor of the Exchequer, will turn on the spending taps when he delivers Britain’s next Budget.  The fiscal policy statement is still theoretically due to take place on March 11, but Downing Street has been hesitant to confirm the timings recently, leading to speculation there may be a delay. The currency is caught between hopes the Government will launch a fiscal stimulus, and worries over the uncertain future of Britain’s trading relationship with the EU.


FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

The bulls failed to reach 7455 yesterday and instead we have dropped off 7451 and seen a bit more bearishness overnight after Apple spooked the markets. Its slightly inevitable that the Coronavirus is going to have an effect on global trade, supply, etc, though at the moment the markets are continuing to mainly focus on the underlying economic strength to ride it out. Hence why we haven’t seen any really major sell offs.

For today it looks like we will see a bear Tuesday and as such shorting any rallies looks like a decent play. We have dropped off the 7450 level and that has now set up 7421 as initial resistance for today where we have the 30min coral and daily pivot. We also have resistance here on the 2 hour chart, though there coral is slightly higher at 7454 – not sure we push that high today but if were to do so then a short here still looks viable as per yesterday’s plan. For now though I am looking at shorting at the 7420 level.

Initial support this morning is here at Fridays low at 7390 so if this were to hold then it should get a rise to that 7420 level. Below 7390 then 7370 is S2 and the key fib level, though 7350 is also coming into play again. Possible range between 7350 and 7450 in play at the moment as well. If this breaks lower though and I suspect that it may well do, then a drop down towards the daily support at 7300 looks likely and a test of the bottom of the 10 day Raff channel. If we were to get this low in the next few sessions then I expect a decent bounce at this area, probably back up towards 7600 or higher.

So, bias today is shorting the rallies and watching 7370 and 7310 as the key supports. Resistance wise I am looking at 7420 and 7455 again.

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