FTSE 100 live outlook prediction analysis for 23rd September 2020
- FTSE rose Tuesday after Monday’s plunge
- US existing home sales highest since 2006
- Premier Inn owner Whitbread to axe 6,000 jobs
- Kingfisher rises after beating profit expectations
- FCA to cut down on insurance ‘price walking’
- Total Government stimulus to tackle Covid-19 passes £100bn
- Pound drops to lowest level since late July before bouncing back
US existing home sales climbed 2.4pc to an annual rate of 6m last month, the fastest pace since 2006. Median prices jumped 11.4pc year-on-year to hit a new high of $310,600. Although the gains are a slowdown from the month before, they point to a steady recovery.
The job furlough scheme needs a “rethink” as ministers prepare to curb the spread of Covid-19 with new restrictions, Bank of England Governor Andrew Bailey said on Tuesday. Chancellor Rishi Sunak faces a difficult decision over the future of the furlough scheme, which Mr Bailey called “extremely successful” but is due to finish at the end of October. An estimated 3m workers are still on furlough but the Governor said that higher use of the scheme in sectors such as hospitality, retail and culture most affected by social distancing meant it was sensible to “stop and rethink”.
Stopgap Funding Bill
The U.S. House passed a stopgap funding bill to keep the government operating through Dec. 11 after both parties in Congress and officials at the White House struck a deal to provide aid to farmers and food assistance for low-income families. The 359-57 vote on Tuesday night now sends the temporary spending bill to the Senate for a vote before the fiscal year ends on Sept. 30. Final passage would avert a government shutdown just before the Nov. 3 general election. In addition to funding most government agencies, the deal provides $30 billion for the Department of Agriculture’s Commodity Credit Corp. that the Trump administration and farm-state lawmakers had sought.
Powell’s Warning
Federal Reserve Chair Jerome Powell said the U.S. economy has a long way to go before fully recovering from the coronavirus pandemic and will need further support. “The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government,” he told the House Financial Services Committee on Tuesday. A recovery is underway; “both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.” In his own remarks, U.S. Treasury Secretary Steven Mnuchin said he and the White House continue to seek an agreement with both parties in Congress on another fiscal relief package.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The dollar rebound extended Wednesday as it pushed past key technical resistance. Asian stocks fluctuated with U.S. futures as investors mulled remarks from Federal Reserve officials that pointed to a slow economic recovery.
Shares fell in Japan as traders returned from a holiday, while South Korean and Hong Kong equities fluctuated. Nasdaq futures dipped after disappointment from Tesla Inc., while S&P 500 contracts were little changed. Australian stocks climbed, while the Australian dollar slipped with bond yields after a prominent economist projected the central bank will reduce interest rates next month. The offshore yuan retreated following a weaker-than-anticipated daily currency fixing.
That was a good rise yesterday from the 5795 support level and we are now back above 5900 as I write this, with the S&P still remaining on course for a back test of the 3330 level. The FTSE has initial resistance at the 5920 level this morning with the 2hr coral and the 200ema on the 30min here, so we may well see a slight pullback from this level initially. Above the 5920 level then the bulls will be targeting R2 at 5954, but should we really push on today then we should see a test of R3 at 6015, and regaining 6000 would certainly give the bulls a boost.
I think a slight dip and rise is a decent play today, so only looking to short the 5920 level first thing today, if it doesn’t trigger early on then I will remove the order.
For support, we have 5850 looking pretty key initially with the 30min coral and daily pivot here. Below this though then we have the 2hr support at 5830 with the 100 Hull moving average here – should we get that low this morning then this area looks to be worth a long as well. The daily chart remains bearish as well for the moment following Monday’s drop, and the 25ema on that for resistance is at 5987. The bulls will need to break above this as well.
I mention that the S&P will be looking for 3330 and we may well see some bears appear here – that may well tie in with the 5920 FTSE resistance level as its currently at 3320 while the FTSE is at 5900.
Bit of a key day today – can the bulls pull it back out of the bag, or will the bears try and take it back down again? The 2 hour charts across the board are looking bullish now though so if it can shake off the political, economic, social and technical (PEST analysis) change we are going through currently, we may well see these support levels hold – 5830 FTSE, 12660 Dax, 3271 S&P.
So expecting a dip and rise initially today on the FTSE, with 5855 support, 5835 below that. 5920, 5955 and 6015 resistance to also watch. Good luck today.
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