Quote from Nick on 22nd February 2019, 9:19 am

22nd February 2019

Mounting worries over a global industrial slump ended a four-day rally in global stocks. The MSCI World Index slipped off a three-month high after PMI survey data indicated that the eurozone’s manufacturing sector has contracted for the first time since 2013. Growth in US factories also slowed, dropping to a 17-month low.

Markets were also unnerved by North China’s largest port banning coal arriving from Australia, the country’s biggest supplier. The block, which sent the Australian dollar sliding 1.4pc versus the US dollar, stoked speculation that Beijing is retaliating for recent flash points between the two countries or protecting its domestic suppliers.

The FTSE 100 lagged behind after being dragged down by heavy losses for BAE Systems and British Gas owner Centrica. It lost 61.23 points at 7,167.39, leaving the index to break a three-week winning run.

The S&P 500 is headed for its first decline in four sessions after factory data in both Europe and the US was below expectations. This reignited concern about the world economy.

The eurozone's ailing manufacturing sector has slumped into contraction territory for the first time since 2013.

Sterling is trading flat against the dollar and is higher against the euro. The stronger pound has dragged on multinational companies and miners today. Earlier today the Government posted its biggest monthly surplus on record in January after a bumper round of tax receipts. The ONS revealed that there was a surplus of £14.9bn in January, well above economists' expectations and £5.6bn more than January 2018. Borrowing in the current financial year-to-date was £21.2bn, the lowest level for 17 years.

Trump Said to Plan Meeting With China Trade Chief

President Donald Trump plans to meet with China’s top trade negotiator Friday afternoon as the U.S. tries to forge a preliminary deal with its biggest economic rival before tariffs on some Chinese imports more than double next month, two people familiar with the matter said. The meeting with Chinese Vice Premier Liu He would cap the latest round of talks in Washington, with Trade Representative Robert Lighthizer leading the U.S. delegation. Plans for a meeting between Trump and Liu signal optimism that talks are making sufficient progress to warrant another face-to-face meeting between the two men. As the discussions continued Thursday, reports emerged that negotiators are working on memorandums of understanding that would form the basis of a final deal. The MoUs would cover areas including agriculture, non-tariff barriers, services, technology transfer and intellectual property, according to a person briefed on the talks.

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FTSE 100 Trading Signals, Forecast and Prediction

We didn't quite manage to drop down to the key 7130 support area yesterday with the break of 7200 and bounced at 7140 instead. As such that area remains as decent looking support for today, and a break below the 7170 support area that we have first thing is likely to drop down to that area. The daily support is also at 7083 for now from the 25ema and the bears will still be keen to drop down to that area.

[caption id="attachment_14600" align="aligncenter" width="821"] FTSE 100 Trading Signals, Forecast and Prediction[/caption]

We also have the 2 hour resistance level to start with this morning at 7187, so the bulls will need to break that early on for a push towards R1 and the fib at 7225. If they manage this we may well see a stutter here, but the daily resistance above this level at 7276 looks likely to be tested, especially if the trade talk remains positive.

Fairly tight range to start with today with 7170 support and 7190 resistance so watch for a break of these levels in either direction to start with. Obviously being a Friday it can pay to be a bit more risk off - lower stakes etc.

Generally it looks positive for a push higher and possibly we follow the ASX200 which rose nicely Friday. The S&P looks like it might well be heading for the 2787 2 hour resistance level.

I have gone for an initial buy at the first support area at 7170 on the plan, but it might also be worth trying a long at 7142 again based on yesterday's action, if we were to drop that low. Generally I am thinking that we push back above the 7200 level today though, if the bulls can break that 7190 2 hour resistance level. Good luck today and have a great weekend.

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