FTSE 100 live outlook prediction analysis for 19th October 2020
The FTSE 100 rebounded Friday, regaining Thursdays drop, while the pound dropped as Boris Johnson says UK will aim for no trade deal outcome. The bulls brought it back above 5900, and the S&P moved above 3500, though subsequently lost it before the final close.
Stimulus Race
Nancy Pelosi has set a Tuesday deadline for more progress on a fiscal stimulus deal before the Nov. 3 election, while President Donald Trump renewed his offer to go beyond the dollar amounts now on the table. Pelosi and Treasury Secretary Steven Mnuchin spoke at length Saturday night about efforts to finalize a stimulus package to help the U.S. weather the effects of the coronavirus, and agreed to speak again on Monday, Treasury spokeswoman Monica Crowley said on Twitter. Their staffs will keep talks going in the meantime.
Markets Open
Currencies were steady at the start of the week and stocks were set to open modestly higher as investors continue to watch U.S. stimulus talks and virus cases increase. The pound held its ground after a report that British officials were prepared to water down Boris Johnson’s controversial lawbreaking Brexit legislation. S&P 500 Index futures opened higher in Asia; U.S. stocks were mixed Friday as giant technology companies dropped and the S&P 500 Index closed little changed, while still notching its longest weekly advance since August.
Wielding Power
China is closing in on the U.S. as the most powerful country influencing the Asia-Pacific, a study showed. While the U.S. is still the region’s top superpower, its 10-point lead on China two years ago has been halved, according to the Sydney-based Lowy Institute’s Asia Power Index for 2020, which ranks 26 nations and territories. The U.S. “lost prestige” due to its poor response to the pandemic, multiple trade disputes and Trump’s moves to withdraw from multilateral deals and agencies, according to Herve Lemahieu, the study’s research chief. “The pandemic was a game changer,” he said in a phone interview.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks rose with U.S. futures Monday amid optimism about some progress on stimulus talks in Washington. Treasuries retreated.
S&P 500 Index futures gained after the gauge closed higher for a third week on Friday. Stocks climbed across Asia with those in Japan outperforming. Speaker of the House Nancy Pelosi set a Tuesday deadline for more progress with the White House after lengthy discussions at the weekend with Treasury Secretary Steven Mnuchin. Treasury yields ticked higher. The pound edged up after a report officials were prepared to water down controversial Brexit legislation in a move that could revive failing talks with the European Union.
Elsewhere, oil fluctuated ahead of an OPEC + meeting. The New Zealand dollar rose after Jacinda Ardern’s emphatic election victory. The yuan pared gains and stocks slipped after Chinese GDP data missed expectations, though the move was muted as retail sales and industrial production beat.
Will we be on for yet another bull Monday? The S&P bulls will want to get the price over the 3495 level ASAP as that opens up a retest of Fridays high at 3516 and keeps the S&P on the path towards the 3550 and higher levels. As such that should bring the FTSE 100 up with it, especially if the pound drops further.
We have initial resistance today at the 5945 level with the 25ema on the daily here, as well as a cluster of outher resistance points on the 30min time frame. As such we may well see a slight stutter here this morning as I am thinking that the overnight rise is likely to continue first thing. If we do drop from here then the daily pivot at 5900 is the first major support area, and then we have the 2 hour support looking decent below that. That is at 5867 for the moment and the bulls will definitely want that to hold any tests today. A break of that and it will start to get bearish.
Above the 5945 resistance level then R2 at 5977 is next up with the round number of 6000 above that. The bulls will still be smarting at losing that last week so recapturing it will be a boost for them. R3 is at 6019 so we may get that high if the S&P pushes on today.
Above the 6020 level and the top of the 10 day Raff channel is the next main area I am looking at which is at 6100 for the moment. The 20 day Raff channel has started to head upwards again as well, so buying the dip on the longer time frames is still the right play.
For support, if the bears were to break below the 5855 level today then 5825 and then the 5790 area are the main levels to look for, the latter being the bottom of the 20 day Raff channel.
Generally looks positive for today, also helped by Pfizer ramping up vaccine production, though seems a bit sudden! Whilst Covid cases continue to increase the death rates are remaining low for the moment. Sounds like the government are trying to resist further national lockdowns, but may well have their hand forced, in another U turn. Locks downs are increasing across Europe.
So, think a dip and rise today watching 5900 and 5865 as the main support levels, with 5940, 5977 and 6019 as the main resistance ones. Good luck today.
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