Bulls defend the 7590 level but for how long | 7666 7712 resistance | 7600 7555 support

Bulls defend the 7590 level but for how long | 7666 7712 resistance | 7600 7555 support

FTSE 100 live outlook prediction analysis for 14th January 2020

The FTSE 100 outperformed its continental peers yesterday, which broadly lost ground, thanks to a weaker pound. The currency sagged as Bank of England policymaker Gertjan Vlieghe hinted at a potential vote in favour of a January cut to the central bank’s main interest rate.

  • GDP fell 0.3pc in November, versus expectations of stagnation
  • Upwards revisions to September and October raise rolling three-month figure to meagre 0.1pc growth
  • Traders now see a 50pc chance of the Bank Rate being cut at this month’s meeting

Manipulator No More

President Trump’s administration has lifted its designation of China as a currency manipulator, removing an obstacle to a trade deal the two nations are set to sign this week. The nation has made “enforceable commitments” not to devalue the yuan and has agreed to publish exchange-rate information, the administration said. The Treasury Department’s semi-annual foreign-exchange report, which was delayed as the U.S. and China finalized a “phase one” trade pact, named no major U.S. trading partner among the 20 economies it monitors for potential manipulation. Treasury Secretary Steven Mnuchin first formally attached the label to China in August, a move that further escalated the trade war with Beijing. Meanwhile, the strengthening yuan is smashing every key level in sight.

Market Optimism

Asian stocks were mixed Tuesday despite optimism over the signing of the U.S.-China trade deal. The yuan is trading near its highest since July. Futures pointed higher in Japan, Hong Kong and South Korea. Technology shares sent the S&P 500 and Nasdaq Composite Index to closing all-time highs. Treasury yields ticked higher and the yen fell, while the dollar edged higher. As investors await the signing of the phase-one trade agreement on Wednesday in Washington, focus is beginning to return to corporate results. Some of the biggest U.S. banks kick off earnings season Tuesday, amid forecasts that overall corporate profits will show the smallest growth in three years.

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

Asian stocks traded mixed Tuesday after a three-day rally in the run-up to the U.S. and China signing a long-awaited trade deal. The yuan hit its strongest since July.

The drop off 7638 worked well yesterday and the bears took it down to 7580 before we then saw the bounce back as the buy the dippers yet again appeared. As such we may well see further upside today towards the 7666 level, ahead of the US/China trade deal phase 1 signing tomorrow. The S&P has continued to push on to new highs and looks set for 3300 but is probably also going to see a reversal at some point. We are still at extreme greed for now as well at 90/100.

With that climb back the FTSE 2 hour chart is bullish with support this morning at 7615, and as we also have the daily pivot here at 7614 we may well see a climb today towards the 7666 resistance level, where we have a key fib and is just shy of R2 at 7674. We may well get a spike down towards the 200ema at 7602 to start with and this dip is worth a tentative long in case that plays out. The bulls defended the drop yesterday however the case remains that a proper break of 7590 will likely see a drop down to the 7555 level, and a break of that would lead to 7500.

On the other hand, if the bulls were to break 7666 then we have daily resistance at 7682 above that, and then we are back at the top of the 10 day Raff channel resistance at 7707, and with R3 at 7712 we may well see a stutter at this level. Could the bulls add 100 points today? Possible, especially if the US continues to rally and the signing tomorrow sends positive vibes through the markets. Gold continues its slide as well, and may well be testing the bottom of the Raff channels at the 1525 level soon.

So for today I am looking at a rise towards that 7666 level with 7682 above that. 7590, 7555 and 7500 for support.

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