FTSE 100 live outlook prediction analysis for 24th July 2020
The number of US workers losing their jobs has risen for the first time since March as hopes of a swift recovery dwindle in the face of surging coronavirus cases. There were 1.42m initial claims for benefits last week, up 109,000 from a week earlier and seven times more than a year ago. A raft of states including California have been forced to reimpose restrictions on daily life following a resurgence of the virus, which has now claimed more than 140,000 lives in the US.
Shoppers are returning to the high street and factory orders have picked up further after a coronavirus collapse, according to a slew of new data which suggests the economy is continuing to recover. The proportion of businesses open to shoppers climbed from 86pc in the first two weeks of June to 92pc in the fortnight to July 12 as lockdown restrictions eased, according to the Office for National Statistics. Footfall hit a post-lockdown high on July 17 at two-thirds of its level a year earlier.
Us Vs Them
Secretary of State Michael Pompeo cast China’s leaders as tyrants bent on global hegemony. President Xi Jinping “isn’t destined to tyrannize inside and outside China forever unless we let him,” Pompeo said Thursday. “Securing our freedoms from the Chinese Communist Party is the mission of our time.” Pompeo cast competition with China as an existential struggle between right and wrong, hearkening back to the language of the U.S.-Soviet standoff during the Cold War. “If we bend the knee now, our children’s children may be at the mercy of the CCP, whose actions are the primary challenge to the free world,” Pompeo said, calling modern China a “Frankenstein” after decades of failed Western engagement. Meanwhile in China, President Xi Jinping is preparing for a leadership contest in 2022, when a once-every-five-years gathering is expected to take place to pick the Communist Party’s top leaders — and public sentiment matters. A crucial pillar of support has been Xi’s personification of standing “tall and firm” in the world.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Stocks in Asia retreated along with U.S. and European equity futures amid concern over escalating Sino-U.S. tensions and worries the recovery in the world’s largest economy has stalled. The dollar extended this week’s slide. Shares in China bore the brunt of losses and the offshore yuan slid as China ordered the U.S. to shut a consulate in a tit-for-tat retaliation. Equities in Hong Kong and Australia were also lower. Intel Corp.’s warning on a production delay weighed on sentiment after triggering an after-hours slump in the stock. Futures on the S&P 500 Index and Euro Stoxx 50 declined. Earlier, the Nasdaq 100 Index turned negative for the week.
We have now dropped down to the bottom of the 10 day Raff channel and support from that is at 6117, though we do have S1 for today at 6132 to start with so we may see a bit of a bullish reaction at this level. The bulls will need to be quick out the blocks today, as a break of the 6100 level will likely ultimately lead to a drop down to the recent low at 5995. Gold has certainly been front running the indices once again, and that rise to 1900 yesterday was a pre-cursor to the drop on indices. Having now stalled at the 1900 level (1909 was resistance on the bigger timeframes though it hasn’t quite managed that, and 1919 is the September 2011 high – 10 year double top?) and we may well see some profit taking on that soon. Or at least some consolidation before another push higher, especially if the economic impact from the C-19 continues. Companies are hoarding cash and still looking to make redundancies once furlough ends. The government are keen to get companies spending but they remain reticent for the moment.
For the bulls they will be keen to drive it back up from this 6120 support area, to at least 6200 where we have the daily pivot. Above this then 6250 is the second test of the 2 hour coral line and the main stumbling block for them at the moment. Above this then the bulls can resume that upward path towards 6450 though. Can the buy the dippers pull it out the bag today?
The S&P is just below its 3230 support as I write this, and with the 10 day Raff channel support at 3213 we may well see the bulls reappear on that too. They need to rally here though otherwise a slide to 3100 is on the cards.
As its Friday it can pay to be a bit more cautious with stake size etc, and I am watching the 6115 to 6130 support area to start with today. Below that then the next support of note is 6040. For resistance, 6200 and then 6250 are the main ones to keep an eye on. Have a good day trading today, and enjoy the weekend.
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