Bulls are back | Strong US jobs data | 7500 7440 support | 7535 7583 resistance

Bulls are back | Strong US jobs data | 7500 7440 support | 7535 7583 resistance

FTSE 100 live outlook prediction analysis for 6th February 2020

Well that was rather bullish yesterday! European markets reversed early losses, ending the session with moderate gains on reports of breakthrough in coronavirus treatment. Strong US employment data underpinned market sentiment as well.  Stocks extended a global rally on eased market concerns about the impact of the deadly China virus following reports of a scientific breakthrough on tackling the epidemic.

London closed in positive territory despite the World Health Organisation playing down hopes of an antidote for the rapidly spreading coronavirus, with the FTSE 100 ending 0.57pc higher at 7,482.48 and the FTSE 250 closing 0.37pc up at 21,520.00. In the eurozone, the German DAX surged 1.48pc and the French CAC advanced 0.85pc.

President Trump

In a result that shouldn’t have surprised anyone, the Republican-led U.S. Senate voted to acquit President Donald Trump on charges he abused his power and obstructed Congress. It ends a historic, bitterly partisan fight, and leaves the final judgement on his actions up to voters in November when Trump must face down a Democratic rival to maintain his leadership as president. Still, it wasn’t a totally resounding show of Republican party unity: Utah Senator Mitt Romney broke rank with his party and find Trump guilty on the House’s charge that he abused his power by seeking a political favor from the Ukrainian government, though he voted to clear the president of the obstruction charge. The votes came in at 52-48 to find Trump not guilty of abusing his power, and 53-47 to find him not guilty of obstructing Congress. Trump is now the third U.S. president to escape removal from office after being impeached by the House.

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

Well the bulls certainly pushed on yesterday (though the Tesla bulls ran for the hills for once) and it looks like we might push on towards the top of the 20 day Raff channel today at 7580 and R2 here as well. As we open we are sat right on the 10 day Raff channel top at 7535 (and as I write this) so we may well see an initial dip first thing down towards the 7500 level. We have the 30min coral support line here so a rise from that may well then play out.

Looking at the S&P, a rise towards the R2 level at 3373 looks likely today, helped by the news out earlier that China said it will halve tariffs on some $75 billion of American imports. US futures rose on that news.

However, don’t fall in love with the upside as they say and we are in fact testing the 10 day channel tops on the indices, while still testing (and holding) the bottom of the 10 day channel on Gold – support at 1550 held yesterday and has continued to do so. I said yesterday that I felt that we would see a drop in indices and a rise in gold, however I may just have been early.

The FTSE may well go for a gap close first thing as well, and this time the bulls will be keen to defend the 7500 level and keep the price above that. Fridays panic and fear has dissipated for now and hopefully, after that news driven move yesterday, we may get some technical levels having a bit more of a bearing. If the bulls were to break 7585 then a rise past 7600 looks likely, and with R3 at 7658 for today we may well head towards that.

If the bears were to break below 7500 then we may fall down as low as 7425 where there are a few supports and a level that should see a bounce. Would be quite the drop though, losing 100 points off the 10day channel top. Will sentiment change that quickly? Maybe! The ASX200 (Australia) had a mildly bullish day after a slow start – we may well do the same ahead of NFP tomorrow.

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