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Can the bulls defend 7200 for a rise towards 7250 7300 | 7170 support | Fed minutes tomorrow | Analysis

12th April 2019

The FTSE100 nearly followed the prediction perfectly yesterday, with the initial drop then rise. Unfortunately it didn’t quite reach he 7374 lower support, not subsequently reach the 7450 resistance, however it was good to see that the technicals were working again after a long time of sentiment driven news. The Brexit delay alleviated the pressure on airlines as IAG and Tui saw a strong rally, sterling struggled as economists predicted that the extension would prolong the uncertainty dampening UK growth. Mining shares led the FTSE 100 lower after investors were unnerved by growth warnings from central banks in the US and eurozone on Wednesday. The index slipped for a third straight day, dropping 3.96 to 7,417.95.

Stocks Edge Lower

Asian stocks had a mixed open after most equity benchmarks declined Thursday, with investors casting an eye toward the start of earnings season. Treasuries dropped as data confirmed the economy remains on solid footing. The outlier was the S&P 500, which eked out its 10th gain in 11 sessions in trading volume more than 20 percent below its 30-day average. Health-insurer shares led decliners as political risks intensified, while industrials paced gains as Boeing, still embattled in the 737 Max crisis, snapped a four-day losing streak. Banking shares rose before Wells Fargo and JPMorgan report first-quarter earnings that will lead off the season Friday.

May Hints at Compromise With Enemies

Theresa May hinted she’s working for a compromise with her domestic political enemies on a post-Brexit customs alliance with the European Union, in a move that would put Britain on course for an even softer divorce. May faced calls to resign from outraged Brexit-supporters in her Conservative Party after agreeing to a six-month delay to Britain’s departure from the bloc. She then risked further inflaming relations with her own side, insisting it’s vital to work with socialist Jeremy Corbyn’s main opposition Labour Party on a joint Brexit plan, even if this is “uncomfortable.”



FTSE 100 Trading Signals, Forecast and Prediction

Overnight the futures have remained quite positive and the FTSE100 looks like we might be on a for a rise towards the 7477 area, if they can break through the 7438 level initially. As that should see a bit of a reaction first thing I am thinking that we will get a dip down from here towards yesterdays closing price at 7420. 7420 has been fairly key and in theory, should now become support. This is helped by the fact that the 200ema and coral on the 30min are also showing support here. On the 2 hour chart the strength has turned this timeframe bullish, with 7425 as support. It’s possible we bounce here, just before the order and slightly lower supports so bear that in mind. Can always fade in longs around this area.

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

If that 7418/20 level holds as support then we should see a rise towards the 7470 to 7477 resistance area, and I think that we may see a stutter here ahead of the weekend. The Brexit delay will probably help us out now, and we get back to a sense of normality on the market with the technicals and patterns becoming more significant again. Sentiment and cable driven moves are hopefully on the back burner for a few months!

For the bears, if they were to break the 7420 area then we are looking at a drop down to 7370 but more likely the daily support at 7354 where we have the bottom of 10 day Raff channel. This area should see a bounce as a break of this will likely lead to sub 7300, most likely the 7250 area.

For the moment things look bullish again, and a rise today towards 7477 looks doable, with a stutter there with any luck as we see some profit taking ahead of the weekend.

Have a good weekend, and good luck today.

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