FTSE 100 live outlook prediction analysis for 10th July 2020
Here’s a recap of Thursday:
- Stock markets broke out of their earlier lethargy to take a dive as investors worried about the damage new outbreaks of coronavirus might do to efforts at reviving the world economy.
- A lower-than-expected number of US jobless claims last week helped sentiment, but the employment situation is still too dire for comfort, analysts said, and could easily deteriorate again.
- After a steady start, the Dow Jones index on Wall Street was nearly 500 points in the red by the late New York morning.
- US stock weakness also pulled the rug from under key European markets, helping to push them into negative territory by the close.
- Gold held above the $1,800 level it had breached for the first time in more than eight years on Wednesday on safe-haven buying.
The FTSE 100 fell 1.73pc lower to 6,049.62 while the FTSE 250 dropped 1.16pc to 16,985.13 as investors worried about the damage new outbreaks of coronavirus might do to efforts at reviving the world economy. A lower-than-expected number of US jobless claims last week helped sentiment, but the employment situation is still too dire for comfort, analysts said, and could easily deteriorate again.
Sanctions Start
The U.S. sanctioned a top member of China’s ruling Communist Party and three other officials over human rights abuses in the western province of Xinjiang — a major escalation in the Trump administration’s increasingly tense rivalry with the country. The U.S. move is tied to the widespread detention of Muslim Uighurs in Xinjiang, a policy that has been sharply criticized by top American officials as well as human rights groups. It comes amid soaring tensions between Beijing and Washington over the origin of the coronavirus pandemic, China’s moves to quell dissent in Hong Kong and a debate over the use of Chinese technology by the U.S. and allies. It seems that everyone is getting swept into the turmoil — now, global banks are at risk of breaching China’s new security law by complying with the U.S.[Bloomberg]
Markets Dip
Asian stocks were on course to follow their U.S. peers with modest declines amid concern that a resurgence in coronavirus cases could slow the global economic recovery. Oil dipped below $40 a barrel and Treasuries jumped. Equity futures pointed lower in Japan, Hong Kong and Australia. The S&P 500 Index earlier fell 0.6%, with financial firms among the worst performers as Wells Fargo prepared to cut thousands of jobs because of the pandemic. Still, the tech-heavy Nasdaq advanced to a fresh record high. Longer-dated Treasuries rose following an auction for 30-year securities that showed strong demand. The start of Chinese trading will be in focus Friday as the Shanghai Composite makes a bid for a ninth day of gains.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks slipped on Friday, paring the week’s advance as a surge in China cooled and concern resurfaced that rising coronavirus cases will hurt the global economic recovery. Treasuries held on to an overnight jump.
The bears managed 6050 yesterday after breaking the 6130 level but the S&P has so far managed to defend the 3120 area, and for today we have the bottom of the 10 day Raff at this level. The 10 day Raff for the FTSE is slightly lower at 5975. If the S&P bulls can defend today then we may well start to see some better upward movement otherwise things start to get quite bearish.
For the FTSE there is initial support at 5999 from S1 and then daily support just under this at 5990. Should the bears break this then I have plotted the pink arrows below as it looks like we will probably drop down towards the 5920 area, and S2 at 5925. These two levels both look pretty key. The FTSE performance has certainly been lagging other markets, probably fearful that our economy will be slower to recover (if..) as we are more service focused than say Dax, which is more manufacturing biased. Despite the fact that the FTSE 100 is comprised mainly of global companies, the general mood is probably filtering through.
We are also nearing the bottom of the Raff channels, with the 10 day at 5975 and the 20 day at 5955 so keep an eye on these areas for reactions also. If the S&P can defend then we may well see a bounce filter through to the FTSE as well. There is potential for the S&P to rally back to 3190 if they can defend these lows.
Resistance wise we have 6090 first up on the daily chart, and the 30min coral just below this at 6085 (and dropping). If the bulls can break through this area then the immediate threat from the bulls is negated a bit and a rise to 6120 and possibly the 6185 red 2 hour coral resistance line. Might be a big ask for today though, to get that high, but you never know – low volume Friday and a likely Fed pump towards the end of the day might help.
So, slightly cautious as its Friday, markets are still choppy but watching 5990, 5975, 5920 as support. 6080, 6120, 6185 as resistance. Have a great weekend.
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