23rd July 2019
The FTSE 100 ended the day almost flat, rising 6.83 points, or less than 0.1pc, to 7,514.93 points. The FTSE 250 had a similar performance, closing up 0.1pc. Things were hardly any more exciting in Europe. The Dax rose 0.2pc with Paris’s CAC 40 gaining 0.3pc.
Asian markets, by contrast, ceded ground on waning hopes of aggressive interest rate cuts by the US Federal Reserve. Japan’s Nikkei 225 shed 0.2pc while China’s Shanghai Composite and Hong Kong’s Hang Seng both fell 1.3pc.
Sterling regained some lost ground from earlier in the day but remains below the $1.25 mark, above which it began the day. The pound is currently trading at $1.247.
Gold prices have fallen back after hitting six-year highs last week, and an eight-year high in sterling.
The economy could already be in a recession caused by Brexit deadlock paralysing businesses, a top forecaster has warned, as it outlined how the new prime minister can minimise the damage from a no deal departure. The National Institute of Economic and Social Research (Niesr) believes there is a one in four chance the economy is already in a technical recession – two consecutive quarters of contraction.
In a gloomy set of forecasts, the independent researcher warned there was a “significant risk that a severe economic downturn will begin within the next six months”. However, Nieser predicted that the new PM and the Bank of England can still stop the economy shrinking in 2020 with an “orderly no deal”.
Iran handed down death sentences to several nationals accused of being part of a CIA-trained spy network, an official said. President Trump denounced the report as “totally false” on Twitter. Oil eased gains as traders digested early conciliatory remarks by British authorities after Iran’s seizure of its oil tanker on Friday. But U.K. Foreign Secretary Jeremy Hunt turned up the heat, labeling Iran’s maritime escapades as “state piracy.” He said European governments will assemble a naval mission to provide safe passage for ships through the Persian Gulf.
President Trump said Xi Jinping “acted responsibly” over protests in Hong Kong, and he hopes the Chinese president will “do the right thing” despite the ongoing unrest. The city’s big-business lobby called on Carrie Lam’s government to pull the extradition law that triggered the backlash, and the South China Morning Post reported that police were acting against triad gangs suspected of beating demonstrators.
FTSE 100 Trading Signals, Forecast and Prediction
For today I am thinking that we may well see a retest of the 30min supports at 7520 to start with today as we have the daily pivot, coral and 200ema all showing support here. If this level holds then we should see a climb up towards the 7551 resistance and then the 7575 area above that. Should the bulls continue to push then the next key levels are 7602 and 7622. The daily chart remains bullish though we have the top of the 10 day Raff channel at 7568 to bear in mind, another reason for thinking that the fib and R2 (7579) area may well see some bears appear.
If the bears were to break below the 7520 level then a drop down to 7482 looks possible again, and 7455 below that. We also have a cluster of daily supports at the 7430 area – the bottom of both the Raff channels, S3 and the daily coral, which hasn’t yet been tested since turning green. Ergo we may well see a bounce at this area if it were to get very bearish during the course of today. Below this then 7395 is still showing.
However, I am not feeling that pessimistic to start this week and the defence of 7500 yesterday suggests that we may see some more upside, in the next couple of sessions anyway. Ideally I would like to see the 7622 level tested as I think that area could be a decent turning point but it feels like it might be a bit of a slog to get there. A break of 7482 will get me more bearish though.
The Dax and S&P 2 hour charts have both gone bullish, with support at 12251 and 2980 respectively.
Cable will also be worth keeping an eye on today with the new PM confirmation. Gold has dropped back further suggesting the immediate “risk off” mode for indices is dissipating a bit. The ASX200 had fairly bullish session Tuesday, rising to R2 before dropping off a bit. If we followed a similar path then a rise to that 7574 area and a drop back would all fit in quite well for today.
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