FTSE 100 live outlook prediction analysis for 15th October 2020
The FTSE 100 rose and dipped yesterday, mostly driven by the pound rising. As sterling strengthened on Brexit hopes, the blue-chips were being forced further into the red. The bulls failed just shy of the 6020 resistance, dropping from the 6010 level down to the 5930 level that saw a small bounce, before further weakness after the close. The S&P fell away again, bewaring the 3500 support. Now the bears would need to break the 3475 level to target the 3430 area, and possibly the 25ema at 3413.
Here were some of the day’s top stories:
- Hedge fund circles British Airways owner: One of Britain’s most powerful hedge funds has taken a major stake in the British Airways owner as the flag carrier braces for a turbulent winter.
- Borrowing to hit 120pc of GDP, warns OECD: Britain’s national debt will hit 120pc of GDP in the coming years – a level not seen since the 1950s – as record peacetime borrowing combined with a slow, tough recovery trash the public finances.
- McDonald’s and Greggs boost Just Eat Takeaway: The addition of McDonald’s and Greggs to Just Eat Takeaway drove a big rise in third quarter sales as more households opted to dine at home.
- Goldman Sachs profits soar on trading frenzy: Goldman Sachs has continued to cash in on the coronavirus trading frenzy after reporting a 94pc jump in profits for the three months to September.
- China’s stock market passes $10 trillion: Chinese stock valuations have hit a record high, topping the peak reached during its disastrous equity bubble five years ago.
Markets Fall
Stocks in Asia looked set to follow their U.S. peers lower after Treasury Secretary Steven Mnuchin played down the chances of striking a stimulus deal before next month’s election. The dollar retreated and Treasuries were steady. Equity futures edged down in Japan, Hong Kong and Australia. The S&P 500 sank as traders also parsed earnings from big banks, with Wells Fargo tumbling after reporting a plunge in profit and warning that net interest income could “get a little bit softer” in 2021. Energy stocks joined a rally in oil and the British pound trimmed gains as investors awaited more news on Brexit negotiations.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks, U.S. and European futures dipped Thursday as investors weighed earnings reports from American banks and fading chances of a stimulus deal in Washington before next month’s presidential election. The dollar and Treasuries ticked higher.
Shares in Hong Kong and South Korea saw the biggest losses, while Chinese stocks outperformed. U.S. shares retreated Wednesday with Wells Fargo & Co. and Bank of America Corp. both falling after disappointing investors. Goldman Sachs Group Inc. outperformed after earnings beat expectations.
The pound and the FTSE 100 were closely correlated yesterday and with the SP dropping off the fall in the FTSE 100 saw the bears take full advantage. We are now on the daily support level of 5890 as I write this, but we do have a stronger looking support slightly lower at 5859. The bulls will be worried that 6000 is disappearing off into the distance, but they may be saved if the S&P can recapture 3500.
Initial support as mentioned at 5890, and we have the key fib level here, along with the bottom of the 10 day Raff. Above that then R1, a key fib and just above the 200ema is 5980 and we may well see any rise stall out here. If the bulls were able to recapture 6000 though then we still have that 6040 as the main line in the sand for the moment though it seems a way away at the moment.
For the bears, a break of 5890 will likely lead to 5860 in fairly short order. We also then have the 20 day Raff channel coming into play, the bottom of which is at 5760. That also coincides with S3 for today as 5763. Its certainly weakened as the week has gone on, the US by fading stimulus and the UK by Brexit.
The focus is mostly on the Brexit negotiations at the moment, and likely to lead to some continued volatility in the pound and also the FTSE 100. If the bears were to break 5860 today then 5833 is S2 which we may see, though I like the plan of 5860 holding any dip this morning. It does look like a rise towards the 5980 level may well play out.
So, slightly tricky one to call but a possible rise and dip scenario may well happen today. Good luck today and stay nimble!
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