26th April 2019
The FTSE 100 broke below the 7444 support area to test the lower zone at 7417 yesterday, as global growth gloom returns. The shock contraction in South Korea’s export-driven economy during the first quarter and Post-It notes maker 3M’s disappointing figures soured the mood on markets, while 3M’s shares slump has single-handedly dragged the Dow Jones into the red.
Asia stocks were mixed Friday, after mixed messages from U.S. benchmarks. While the tech-heavy Nasdaq reached a recordfollowing strong results from Microsoft and Facebook, industrials faltered with the S&P 500 Industrials Sector Index falling 2 percent, the biggest drop since March 22. The dollar extended gains to a four-month high and Treasuries dipped after solid U.S. durable-goods data. Brent crude couldn’t hold a rally past $75 a barrel.
Main news today is USD Gross Domestic Product Annualised (QoQ) at 1330, forecasted at 2.2%, same as previously. On the earnings front, we have results from Exxon Mobil, Colgate, Chevron, American Airlines, Total, Deutsche Bank, Daimler, Sanofi and AstraZeneca.
FTSE 100 Trading Signals, Forecast and Prediction
The bulls sort of defended the 7417 area yesterday, though the eventual low was 7405 but the market has risen back. Whilst 7417 is still showing as support on the bigger timeframe charts, the 7405 level is now the one to watch. If the bears were to break below this today then we will likely see a drop down towards the 7387 level where we have a key fib and the bottom of the 20 day Raff channel.
With yesterday being weak the 2 hour chart remains bearish, and the resistance from that is at 7472 though the overnight at 7455 is the first hurdle that the bulls will need to jump. If this level looks to be acting as resistance at the time then trying a short around this 7455 level is worth a go. Going back to the 2 hour chart, above the moving average we also have red coral resistance at 7489 currently (but dropping down, so I am favouring a short around this 7470 to 7488 area today. Above this level then the 7530 and 7550 levels are still on the daily radar and the former is also worth a short.
Of course its Friday today after a shortened week of UK trading, and we also have the US GDP out at 1330 so bear both of those in mind that we may have a choppy one.
I have plotted the arrows based on the 7405 support level holding, however, the Plan B pink one is if that breaks then a dip down to 7385 and then a rise from there instead.
The daily RSI, having dropped down through 70 when we hit that extreme greed of 75/100 on Wednesday is now at 55, while greed is at 71/100 currently. It’s worth keeping an eye on that as once it starts getting into extreme greed/extreme fear then you usually see the market react accordingly (greed will see a drop, fear will start to see the buying).
So watching 7405 and 7385 as support; 7455, 7472, 7488, 7530 as resistance for today. Feels like shorting the rallies is probably a decent plan for today. Have a great weekend and good luck today.
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