5th February 2019
The Brexit impasse has been blamed for derailing the construction sector’s recovery after growth spluttered to a 10-month low in January. Construction companies cited Brexit uncertainty for the sharp pullback in growth to its lowest level since the ‘Beast from the East’ brought the sector to a standstill last March. IHS Markit’s PMI index slid to a score of 50.6 last month from 52.8 (any reading above 50 indicates growth). Commercial work declined for the first time in 10 months while civil engineering activity dropped off sharply following December’s 19-month high. Housebuilders continued to be the sector’s strongest part.
Alphabet reported thinner profit margins in the fourth quarter as it spent heavily to expand its cloud and hardware businesses.
The 7005 FTSE support area held well for the long yesterday with a rise to the 7060 resistance area by the time the US closed for the day. Overnight we have remained at this level and with the stop at 7040 on the remainder of the long, we might well see a move through the 7060 stick and further upside is on the cards.
The ASX/Australia had a rise and dip day, after financials rallied strongly initially. The Asian markets were mostly closed Tuesday for New Year.
FTSE 100 Trading Signals, Forecast and Prediction
In theory if the bulls can break the 7060 resistance level convincingly and hold above it then we should see a rise towards the 7200 or higher area. We have hovered around the 7060 area overnight and we are heading towards a State of the Union address from Trump later, and then BoE on Thursday. With the Asian markets closed today for the New Year the trade tariff rhetoric has taken a back seat for the moment though of course that could change at any moment. The latest was that a deal is possible again though. Markets seem to be pricing that in, hence the rise.
Initial resistance above the 7060 is at 7094 where we have the fib level and just above R1 which is 7086. As such we may see a stutter at this area and a dip back down with 7060 then becoming support. Above this then the top of the 20 day Raff channel at 7122 and the daily 200ema at 7163 are the next upside areas of note.
Support wise, the daily pivot at 7044 starts things off and the stop on my 7005 long from yesterday is just below this. If the daily pivot were to break then a drop down to the 7004 level looks probable. Below this then the 200ema on the 30min is at 6986 and may well see support. Lower down then we still have 6930 in play, 6901 below that and a break of that will change the tone again, and then the lower supports at 6740 or lower are back on the radar.
Cautiously bullish for today looking for a rise towards that 7100 area initially. If the bears do take charge then the 25ema on the daily at 6901 hasn’t been tested since we started getting bullish from 6750 and may well see support. As such if we were to drop to this area we may well see that hold.
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