Bears regaining control | Bulls cant break 6100 | 5910 5800 support | 5995 6078 resistance

Bears regaining control | Bulls cant break 6100 | 5910 5800 support | 5995 6078 resistance

FTSE 100 live outlook prediction analysis for 22nd May 2020

  • US jobless claims fell to 2.4m last week, with continuing claims at 25m
  • Nearly 39m Americans have lost their jobs in the past nine weeks
  • UK composite purchasing managers’ index rises to 27.8 – indicating continued private sector contraction
  • PMI readings suggest eurozone economy remained stuck in deepest downturn ever recorded
  • Stock down after Donald Trump’s launches Twitter rant against Beijing

Here’s a short recap of what happened with markets…

  • Europe fell into the red after rallying for much of the week amid concerns over the long-term impact of the virus and worsening China-US relations.
  • The Dow Jones tried to lift Europe into the green though the US open did help ease the morning’s losses.
  •  Another 2.438 million Americans filed for unemployment.
  • The dollar rose after three consecutive days of losses and oil prices also climbed higher.
  • Gold was in the red today as the US dollar’s recent negative run came to an end.

London’s benchmark index closed 0.86pc lower while the FTSE 250 climbed 0.11pc amid concerns over the long-term impact of the virus and worsening China-US relations. In the eurozone, the Frankfurt DAX and Paris CAC fell 1.41pc and 1.2pc respectively. The dollar rose today as well as oil.

Virus Update

A third of U.S. adults, about 94 million people, have delayed or avoided getting medical care during the outbreak, the Census Bureau estimates. A report from a London college estimates 4.1% of the U.S. population is infected. Also, the FDA put out a list of 27 antibody tests that can no longer be sold in the U.S. for lack of proper vetting. Meanwhile, the Treasury secretary signaled a need for more U.S. economic stimulus, and major job losses mounted as more than 2 million Americans applied for unemployment benefits last week. New York canceled in-class summer school. Starbucks is seeing a rebound in sales at coffee shops, and Facebook is now letting some employees work from home permanently. Around the world, cases have now topped 5 million, with deaths exceeding 329,000.[Bloomberg]

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

Asian stocks fell Friday, with the bulk of losses coming in Hong Kong, as China announced plans to impose a national security law on the city, which threatened to further escalate tension between Washington and Beijing. Treasuries climbed with the dollar.

Since nearly managing to reach 6100 yesterday we have steadily sold off and are now at 5950 as I write this with a possible test of the key daily support at 5915 looking like it might be hit today. If we do get that low then I am thinking that we may well see a bit of a bounce here, and its also just above S3 for today which is at 5894. With this drop the 2 hour chart has gone bearish of course, and having now moved below the coral line we have resistance on that at 6028 for now.

We have a bank holiday in the UK on Monday and as such may well see a slight reluctance to hold positions over the weekend, and as we have been in buy the dip mode all week, today it feels more like sell the rally.

I am looking at an initial climb today, towards the 30min resistance area at the 200ema and fib level backtest at 5995. We may then well see more bears enter here though the bulls will of course want to get the price back above 6000 ahead of the weekend. We are just below S2 as I write this at 5945 so going for a bit of a gap close up towards the 6015 level (and that 30min resistance) would all fit in quite well. The S&P stalled once again at the 2975 level, running out of steam before getting 3000, as the US v China rhetoric ramps up again.

Below the 5915 level, and S3 at 5895 we may well fall away steadily as the next main support is at 5800. If that breaks then the slide could really gather momentum. On the upside, if the bulls surpass the 6020 level then we may well be back on course for 6130 next week. But with the daily pivot at 6040 and quite a few resistance levels showing up, I think the bears may well win the day today. That said, will we get the usual Friday night pump on the US markets?

So, looking for a rise and dip, with 5915 as the main support level, and then 5995 and 6040 as the main resistance levels for today. As its Friday and before a long weekend it can be prudent to lower the risk (lower stakes etc). Have a good long weekend.

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