19th October 2018
The bulls failed to break above the 7075 level yesterday, and indeed later on in the day we saw a much sharper sell off following the US down, as the S&P broached the 2800 level. Overnight has seen a bit of a snap back though, with the FTSE futures prices rising to 7050. The bulls need to break above the 7072 level again though, otherwise we are heading below 7000 again.
Yesterday afternoon, a risk-off tone gripped global financial markets, with U.S. stocks sliding while Treasury prices climbed with the yen on demand for havens. American equities fell the most since last week’s rout as investors worried about the U.S.-China trade war’s impact on economic growth, the Italian debt crisis and rising interest rates. High-flying technology shares again led the selloff, while defensive sectors like utilities and real estate fared better. Mixed earnings, with disappointments from key industrial and tech names, added to investor anxiety. The S&P 500 slid almost 1.5 percent, while the dollar touched its highest level in more than a week and the 10-year Treasury yield fell to 3.17 percent. Italy’s yield spread over Germany’s safer debt hit its highest point since 2013 as European Union officials questioned the country’s budget plan.
U.S. Treasury Secretary Steven Mnuchin withdrew from an investment conference in Riyadh as the Trump administration tacked a bit on Saudi Arabia, under increasing pressure to hold its leaders accountable for the disappearance of journalist and critic Jamal Khashoggi. Mnuchin announced his change of plans after meeting at the White House with President Donald Trump and Secretary of State Mike Pompeo, who was dispatched on Monday to Saudi Arabia and Turkey, where Khashoggi was last seen.
News highlights today include Canadian CPI, US Existing Home Sales, Baker Hughes Rig Count, BoE’s Carney, Fed’s Bostic and Kaplan.
FTSE 100 Trading Signals, Forecast and Prediction
It’s a good sign for the bulls that the futures prices have climbed back above 7000 following that late sell off down to 6980. However, they once again have the 7075 area as the line in the sand that they need to break above. With R1 and a key fib at 7069 we may well see an initial dip from this area this morning. If we do then once again we are looking at a drop to 7025 as per yesterday, and also the level where we have the daily pivot. If the bulls can maintain a bit of strength this morning with a slow drop down, then the 25ema on the 30min may well stabilise and go green at this level too.
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