19th July 2019
The benchmark FTSE 100 index traded broadly in line with European markets, falling 42.37 points to 7,493.09, a 0.56pc drop. France’s Cac 40 shed 0.38pc, while Germany’s Dax fell 0.92pc. The pound rose to within touching distance of the $1.25 milestone against the US dollar after MPs voted to prevent Parliament being suspended to allow a no-deal Brexit to be forced through. Sterling also rose against the euro following the vote, breaking through the €1.11 barrier.
Iranian Drone Destroyed
Donald Trump said the U.S. shot down and “immediately destroyed” an Iranian drone that approached the USS Boxer near the Strait of Hormuz. The drone “was threatening the safety of the ship and the ship’s crew,” the president said, adding that he’s calling “on other nations to protect their ships as they go through the Strait.”
Asian Stocks Move Higher
Asian futures had a positive open after U.S. stocks rebounded from early losses. The recovery was boosted by comments from New York Fed President John Williams, who highlighted the need for swift action should the economy stumble. The S&P 500 erased losses to close slightly higher, led by consumer and financial stocks, while 10-year Treasury yields fell. The dollar was weaker against all major peers, and gold was higher.
Trade Talks Inch Foward
U.S. Treasury Secretary Steven Mnuchin said he and Trade Representative Robert Lighthizer had a call scheduled later Thursday U.S. time with their Chinese counterparts, denying Huawei restrictions are a sticking point in trade talks. Mnuchin also said there’s no change in the U.S.’s dollar policy “as of now,” but wouldn’t rule out a shift in the future. His comments come as the Trump administration softens the long-held U.S. stance of supporting a strong dollar, instead favoring a stable exchange rate as it battles China in a trade war and threatens tariffs on other countries.
Earnings today – American Express, Schlumberger, BlackRock, State Street
News – UK PSNB, Canadian Retail Sales, University of Michigan Sentiment (Prelim), Baker Hughes Rig Count, Fed’s Bullard and Rosengren, BoJ Governor Kuroda
FTSE 100 Trading Signals, Forecast and Prediction
Well we have had a decent bounce so far from just above the daily support level yesterday at 7475 (low was 7481) and we are now back above the 7500 level, and testing the 2 hour resistance as I write this at 7532. As such we may well see a small dip initially, down to the 30min support at 7500. The bulls will be keen to break above the 7532 though and we then have the fib at 7545 and R3 at 7557 as the next resistance areas of note. However, it does look like we are still on a path towards the 7622 resistance level and I am thinking that a rise to this level is a decent short there. If the bulls were to break 7622 then 7698 is the next level of note but doubtful we get that high today! 7622 isn’t out of the realm of possibility though, especially if the S&P goes for a strong close to the week following yesterday’s dovish comments.
Still simmering tension in the Middle East with the US shooting down an Iranian drone as the latest conflagration, though reports (probably false) that it may be a US drone they shot down!
On the support side of things, then I am looking at the 7500 level holding initially, as we have 30min support here from both the daily pivot and the coral line. The 25ema on the daily is still to be properly tested and has risen to 7485 for today, so if the bears were to break 7500 then thats the next level of note. Below this then 7451 is the 20 day Raff channel bottom and likely to see a bounce, most likely to test (or retest) 7620. I am not expecting a drop down this far though today and looking at the 7500ish area to hold.
Cable has continued its rise and still looks to be heading for 12600, while gold, having played silly buggers with us yesterday, has risen strongly from the 1418 area as expected to now test the 1450 area.
As its Friday be slightly more cautious as they can be a bit of a weird one, but the signs are there for a more bullish session. Watch 7532, 7555, 7600, 7620 for resistance, 7500, 7485, 7450 for support. Have a great weekend!
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