FTSE 100 live outlook prediction analysis for 2nd September 2020
It was a poor day for the FTSE 100, which caught up with Europe’s losses on Monday and then added some of its own, significantly underperforming a largely flat set of continental indices. The FTSE 100 hit a three-month low, closing 1.7pc lower, as the pound rallied against the dollar. Poor performance from banking and energy stocks also hurt the index.
- UK manufacturing activity continues to surge
- Mixed picture as parts of Europe’s manufacturing rebound stall
- FTSE 100 falls, meaning Apple is now bigger than entire blue-chip index
Diageo, GlaxoSmithKline, AstraZeneca, Ashtead and Unilever all derive a large portion of their revenue from overseas, so the push higher in the pound usually hits the stocks. The declines in Royal Dutch Shell, BP, HSBC and Lloyds are weighing on the British benchmark too. Mining stocks such as Fresnillo, Glencore, Anglo American and BHP Group are some of the best performers on the FTSE 100. The well-received manufacturing data from China overnight has lifted metal prices and in turn the mining companies.
Front-Runner Falters
One of the world’s fastest-moving efforts to develop a Covid-19 vaccine is falling behind rivals. Its advance has seemingly been stymied by political tensions between China and Canada, as well as concerns its shot may not work as well as others. CanSino Biologics, the Chinese company which in March started the world’s first human tests on an experimental coronavirus shot, has yet to kick off critical final-stage trials. It’s curious, because rivals like U.S.-based Moderna and Britain’s AstraZeneca, as well as China’s Sinovac Biotech and Sinopharm, are well into this last phase of testing. CanSino, meanwhile, was supposed to send its vaccine candidate — developed with Canadian technology — to Canada so that final-stage tests could begin on Canadians, as per an agreement with the country’s government. The vials never arrived. Guy Saint-Jacques, a former Canadian ambassador to China, said it’s clear this isn’t just a bureaucratic glitch, because the company appears to have shipped to countries friendly to China. Meanwhile, experts say there isn’t enough evidence to recommend the plasma therapy touted by U.S. President Donald Trump.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian equities were mixed on Wednesday, while U.S. and European futures climbed, as investors took stock of gains that propelled global shares to record highs. Emerging-market currencies weakened.
Australian stocks outperformed, while Japan and South Korea posted more modest gains and China and Hong Kong edged lower. S&P 500 futures rose after a climb in Apple Inc. again pulled the benchmark to an all-time high. Euro Stoxx 50 contracts also advanced.
Pretty bearish on the FTSE again yesterday once it broke the 5900 level, hitting a low at 5825 but has climbed back a bit since. As such, the 30min chart is offering initial support at the 5888 level where we also have the daily pivot and as such, if we do get an initial dip down we may well see this area hold. If not then 5807 beckons where we have S1 and an area that should hold. If that breaks then the bottom of the Raff channels are both at the 5750 level and ties in with S2 at 5740 so should hold. That said I am not expecting us to get that low today as the bargain hunters will be starting to sniff around the FTSE soon. Despite Brexit and the dollar weighing on it at the moment.
The S&P has continued its march upwards, and news yesterday that Apple is now worth more than the entire FTSE 100 is quite something. Having popped through 3530 we have 3565 as the next resistance level of note on that for today. Certainly looks like it will get there! 3531 has now locked in as 2 hour chart support as well – tying in with previous resistance becoming support. A drop to this level is worth a long.
For the FTSE, if the bulls push on today then I am looking at a rise initially to the 200ema at 5955 where we also have the R1 level for today. A slight pause here before some more upside towards the 5990 level would all fit quite well, and also follow the bullish Australian session (which is also a commodity heavy index). The bulls will of course want to be getting this back above 6000 but with the daily trends still heading down, along with the negative backdrop are currently losing the battle.
Above the 5988 level then 6041 and 6060 are the next resistance levels to watch for, though that feels a big ask for today, however I am expecting a bit of a retrace of yesterdays fall so wouldn’t be surprised to see a bullish session today.
So, watching 5890, 5865 and then 5808 as support levels for today, 5955, 5988, 6042 for resistance.Good luck today.
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