8th April 2019
Hopes for a trade deal between Washington and Beijing, and stronger-than-expected US jobs numbers, helped keep the FTSE 100 in positive territory in afternoon trade on Friday. This was even though the pound slipped on doubts over Theresa May’s plans to ask for a Brexit delay.
Sterling, which has been trading around the $1.31 level since the start of March, touched a day low of $1.3014 as France and the Netherlands expressed doubts about the Prime Minister’s plan.
The blue chip index, however, ended at a six-month high of 7,428.12, up 44.9 points on the day, having enjoyed its biggest weekly rise in two months. No doubt helped by the last minute rush of end of year tax money topping up pesnions, ISA’s etc.
In New York, benchmark indices tested new highs as the US economy added 196,000 jobs in March, while President Donald Trump encouraged traders by saying on Thursday that a trade deal could be concluded within four weeks.
In a further sign of the European slowdown, the market for stock floats shut down at the beginning of the year as mounting political uncertainty and growth worries led to the worst quarter in more than a decade. According to data from Refinitiv, the amount raised from stock market listings in Europe plunged by 98pc year on year to just $292m (£223m).
Growing angst over Brexit, December’s stock market turmoil and the trade war have paralysed the market for share offerings, resulting in the lowest number of public share sales since 2008. There were only four listings on London’s main market in the first three months of the year.
FTSE 100 Trading Signals, Forecast and Prediction
We are at the start of the new tax year so may well see an initial rise as the new ISA, pension, SIPP money etc flows in. As such we should see 7450 tested again, and a rise initially, despite the weakness overnight. The move about the 7442 resistance level on Friday was a good sign for further upside in the bigger picture, frustrating though it was to get stopped at the high to now see it at 7425. The move though that resistance is a good sign for the bulls and further upside. The US data on Friday was also positive and rhetoric over the weekend bodes well for US/China trade wars.
Above the 7442 level then we have the overnight high at 7465, but generally, now we have popped above the 7440 level we could well be on for a rise towards 7484 initially, where we have a key fib, with a distinct possibility of 7563 later this week. However, that said, there is resistance of note at 7497 and 7526 – so not a time to fall in love with the upside as they say, but something to be aware of.
For today I am thinking that buying the dip is probably prudent, and as such I am looking for a rise from the 7400 support area initially, though if we dip slightly lower then the fib level at 7382 and the 200ema at 7392 look viable for an entry. This however would be the third test of the 200ema on the 30min since the bullish move got locked in at 7216 on 28th March. The more tests a support line gets the more likely it is likely to break so bear that in mind.
It generally feels positive for today. A move above the 7460 level should see 7480ish, possibly even 7500 if the markets stay favourable. The slight spanner in the works is that looking at the SP, Dax and FTSE as a whole they are all starting to go bearish on the 30min time frame, while the 2 hour Dax is showing 12080 as resistance. The SP has also retraced a bit of Friday’s rise already.
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