Bulls failed to break 7370 | 7260 7230 support | 7400 resistance | End of May in more ways than one | Live trading

Retail woes | 7395 7420 still resistance | 7330 support 7300 below that | Learning to trade analysis discussion

23rd May 2019

The pound tumbled to a four-month low against the dollar as the backlash to Theresa May’s new Brexit deal grew and speculation over her future swirled. Sterling resumed its slide against rivals after the prime minister’s offer of a vote on a second referendum fell flat with MPs. It sank as much as 0.8pc versus the dollar to below $1.27 as calls for Mrs May’s resignation mounted. The pound clawed back some of its heavy losses late in trading after some reports claimed that her departure was imminent.

Asia began subdued after the losses on Wall St where US-China trade uncertainty remained at the forefront of market focus, with comments from China suggesting unwillingness to back down and potential for a prolonged trade war;

The FTSE 100 continued in the 7290 to 7370 rage, failing to break higher despite several attempts. It meant that the 7400 remains as resistance above that for the moment, but the bulls failure to push higher yesterday probably means that we will be looking for a drop down to the support at 7283 and possible 7260 today. I am thinking a possible dip and rise will play out though today.

Trade wars

As U.S. President Donald Trump continues to raise the stakes with threats to kneecap Huawei Technologies Co. and Chinese surveillance-equipment firms, officials in Beijing are weighing their options to respond. They are stoking up anti-U.S. sentiment and drawing up contingency plans to bail out Huawei, while also still calling for dialogue to resolve the dispute. But there’s uncertainty over whether the U.S. is fundamentally looking to curb China’s rise as a global superpower, or just ramping up the rhetoric. Trump is still likely to meet Chinese President Xi Jinping in late June, Steven Mnuchin says.

Stocks Sink, Asia Follows

Asian stocks initially had modest declines Thursday after U.S. equities slipped amid ongoing trade-war tension. Treasuries rose, with 10-year yields remaining down after the release of the Fed minutes. The dollar was mixed, gaining most against the pound and losing ground against the yen. Gold was little changed.

May Still Standing

Theresa May’s premiership is hanging by a threadafter a high-profile Cabinet minister quit and a growing revolt over Brexit looked set to force the British leader from power, although rank-and-file Conservatives decided not to change leadership rules that would make it easier to oust her. In her letter of resignation, Andrea Leadsom said she no longer believed the government’s approach will honor the result of the 2016 referendum.



FTSE 100 Trading Signals, Forecast and Prediction

We have dropped back to 7300 overnight, with the political situation in the UK in a state of flux and a lot of will she won’t she… Asia didn’t have the strongest session, so I am expecting a dip down on the FTSE towards the 7260 key daily support. The bulls failure to push above the 7370 level yesterday doesn’t enthuse much buying appetite for the moment.

If we break below S1 at 7296 early doors then I am looking at a drop down towards S2 at 7273, and also the daily support at 7260. I think a long here is worth a go as a break of this fairly key looking area (and Monday low) means 7224 is then on the cards. The bulls will of course be keen to keep this in the 7290 – 7370 range (and ideally higher) and probably test that 7400 resistance level.

FTSE 100 Trading Signals, Forecast and Prediction
FTSE 100 Trading Signals, Forecast and Prediction

If we follow the route that the ASX200 took today then I am thinking that we may well see a bit of a move up initially to close the gap at yesterdays close price, and a test of the daily pivot at 7334, before dropping back down. We do of course have the European elections today in the UK so worth keeping an eye on the polls for that as well. If the 7334 resistance level holds then a drop down from there is likely and it looks a decent shorting area. The 2 hour chart remains bearish with resistance at the 7352 level, and the coral may well turn red today (shows downtrend on that timeframe) and act as resistance also at 7350. Of course, should the bulls break above this level then 7370 is still the level to watch with 7400 to 7410 above that. The longer term formulas are also showing 7529 as daily resistance and the top of the 10 day Raff at 7500, so should the bulls defend the support levels we may well see a bullish move higher. Maybe a more Brexiteer biased PM (Boris?) will get it back on track rather than the continual voting things down.

Recommended Broker


IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership

If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

  • Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
  • Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
  • Telegram live trading room and webinar group membership for discussion and realtime trade updates