26th June 2018
Well that most definitely wasn’t a bull Monday yesterday! The bears broke the 7605 support area which meant that we were on a path to 7500 and sure enough we hit that before the bell as the US also sold off heavily. Should 7500 go then we are looking at 7360 as the next major daily support area.
Escalating trade tensions sent U.S. stocks to the steepest drop since early April, as President Trump’s threats of more protectionism against major partners were met with Chinese and European vows of retaliation. US Treasury Secretary Mnuchin suggested investment restrictions were not just specific to China but to all countries trying to steal US technology. The S&P 500 Index fell 1.4 percent, though White House Trade Advisor Navarro provided momentary relief as he stated the US has no plans to impose investment restrictions but will defend itself against threats. The Dow Jones Industrial Average closed below its 200-day moving average. The rising tensions have weighed on stocks ahead of the second-quarter earnings season that so far has seen estimates keep rising.
Looking ahead to todays news events, highlights include US CaseShiller, Richmond Fed, NZ trade, BoE’s McCafferty, ECB’s de Guindos, Fed’s Kaplan and Bostic.
FTSE 100 Trading Signals, Forecast and Prediction
It feels a bit dubious after the significant falls yesterday but I think we build on this bounce from 7500 that we are currently seeing for a rise towards the resistance at 7600 (possibly 7628 where we have R1). The recent pattern has been fairly common with bull Monday, bear Tuesday but as we didn’t have that this week then we may well see a bit of a relief rally/dead cat bounce/consolidation today.
Bloomberg’s Asia Report here
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