Bears appear but bulls will want to get back above 6000 | 6033 6130 resistance | 5940 5920 support

Bears appear but bulls will want to get back above 6000 | 6033 6130 resistance | 5940 5920 support

FTSE 100 live outlook prediction analysis for 20th May 2020

  • UK unemployment claims surge by 856,500 to 2.1m in April– largest ever month-on-month increase
  • Employment was at a record high in three months to March
  • Real wages continued to fall
  • EasyJet says 9m customers’ details were access as part of cyber attack

The number of Britons claiming unemployment benefits soared to the highest level since 1996 in April as the coronavirus lockdown devastated the UK labour market. A measure of total claims based on data from the Department of Work & Pensions soared by 69pc, or 856,500 – its largest-ever one-month jump – the Office for national Statistics said. The rise put the total number of people claiming Jobseeker’s Allowance or Universal Credit at around 2.1m. The number would have been substantially higher were it not for the Government’s furlough scheme, which has allowed many businesses to avoid or postpone job cuts.

  • Europe’s major stock markets mostly retreated as traders banked profits, digested grim data and mulled coronavirus vaccine hopes.
  • London stocks lost 0.8pc after official data showed a record surge in UK jobless claims during April
  • In the eurozone, Paris shed 0.9pc on news that European auto sales had collapsed by a record 76.3pc year-on-year in April.
  • Frankfurt eked into positive territory just before the closing bell.

London’s benchmark index closed 0.69pc lower as traders booked profits from yesterday’s huge gains.  The FTSE 250 however did manage to end in positive territory, up 0.53pc to 16,316.02. Oil was higher on the day again as optimism in relation to demand has propped up the energy.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Stocks in Asia were mixed as reports on Moderna Inc.’s coronavirus vaccine added to concern that a successful way to beat the pandemic remains a long way off, offsetting calls to stick with bets on more equity gains. Treasuries held an overnight advance.

Stock markets had a wobble yesterday on the not very surprising news that the Moderna vaccine isn’t a panacea to the virus at the current moment, but I am sure there are many more companies in the race. As such, the FTSE 100 tumbled from the 6120 level, just shy of the 6130 resistance, so that remains as resistance for the moment. The low overnight was at 5926 and the bulls have fought back a bit overnight, helped by a strong ASX200 session on Wednesday. To start with we have the 200ema and the fib level on the 30min for decent looking support at the 5940 level so we may well see an initial dip down to here this morning before some further upside. There is still an appetite for buying, as the argument goes that equities remain attractive even as the threat of a second wave of coronavirus infections looms at a time when there’s no medical solution. The reasons being that we’re past the first stage of the outbreak, central banks and governments are supporting markets, and shares are appealing compared to other asset classes such as bonds. We shall see.

If the bears break below 5940 then 5916 is the 2 hour coral and since turning green (uptrend) we haven’t had a test of that as yet, so we may see this hold, though after yesterdays drop the moving averages on the 2 hour chart are now bearish (hence favouring the opening dip from this 5990 level we are at as I write this).

For resistance, 5990 is the 30min coral and also the daily pivot at 5996. Above this 6030 is the key fib level, though if the bulls get some momentum and the desire to keep the price above 6000, may well see a push higher after an initial reaction here, targeting the 6130 level once again.

So, bit of a mixed bag for today with bullish and bearish arguments. Looking at 5940 and 5916 as support. 6030 and 6130 as the main resistance levels. Good luck today.

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