Quote from Nick on 25th September 2019, 11:02 am

25th September 2019

• Dollar weakens as Trump criticises China in speech to United Nations
• US President says World Trade Organisation needs drastic change
• Supreme Court makes unanimous judgement that Boris Johnson’s prorogation of Parliament was “unlawful”
• Court verdict sends pound spiking, but pare back in afternoon

Well that all escalated quickly yesterday. The bears broke below the 7285 level on the FTSE 100, the S&P 500 fell the most in a month, Trump has a formal impeachment inquiry opened into him, Metro bank might be the next high street casualty, Boris Johnson overruled by Supreme Court, Trump kicks off at China, and that was just the main headlines! Having defended the 7285 level quite strongly, the break below it now opens up a likely test of the 7240 support area and possibly even the bottom of the 10 day Raff channel at 7170.

Impeachment Inquiry

Speaker Nancy Pelosi said the U.S. House is opening a formal impeachment inquiry of President Donald Trump following revelations that he pushed Ukraine’s government to investigate Joe Biden, now the front-runner for the Democratic presidential nomination in 2020. Trump is seeking to defuse the ballooning controversy by releasing the transcript of a July phone call with the Ukrainian president. As Pelosi made the announcement, the president dismissed the move as “Witch Hunt garbage.” Here’s a deeper dive into why impeachment is being discussed again now.

Markets Rattled

The U.S. impeachment push adds to a raft of concerns weighing on global markets. Stocks in Asia looked set to fall after U.S. equities dropped and Treasuries rose on political turmoil in Washington. The S&P 500 fell the most in a month, while the 10-year Treasury yield hit a two-week low, the dollar fell to session lows and the yen strengthened. Trump’s speech at the United Nations Tuesday ratcheted up tensions between the U.S. and China, while underwhelming economic indicators are adding to worries. Elsewhere, oil fell on signs Saudi Arabia is making progress in restoring lost output and sterling strengthened as the U.K. Parliament prepared to reconvene following a Supreme Court ruling that Prime Minister Boris Johnson’s decision to suspend it was unlawful.

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FTSE 100 Trading Signals, Forecast and Prediction

The fall out from the Supreme Court decision is likely to continue today, and Brexit will be back to the fore. Coupled with a drop through the 7290 support that held repeatedly, and the fact that we are heading towards the end of the quarter on Monday, we may well see further declines towards the 7234 level today. There is also the bottom of the 20 day Raff channel (which is still heading up) at 7222 and will likely be tested. With the recent drop off the 7370 level the 10 day Raff channel is heading down and has support at 7175 so we could see this tested tomorow/ Monday on quarter end profit banking.

[caption id="attachment_15094" align="aligncenter" width="821"] FTSE 100 Trading Signals, Forecast and Prediction[/caption]

The S&P finally dropped down to test the 25ema on the daily at 2966 yesterday and we saw a small bounce at just below that area. It is now at the bottom of its daily channel at 2963 but a break of this will likely see a move down to 2943 which may well hold, where we have a green daily coral support line.

7290 will now become resistance on the FTSE 100, but we have the 7315 just above this as 2 hour resistance snd also the 200ema on the 30min, so if we get to this level we may well see a stutter at this area. However, there is a key fib and R1 at 7334 so we may well see slight overshoot to this area before some declines kick in again.

Meanwhile, a UK government source expects a quick push for an election again perhaps even as early as this week, Cabinet source sees this being tabled on Thursday so keep an eye on this. The shambles rumbles on...... Meanwhile on the trade front China’s Foreign Minister says US-China relations have come to a crossroad, and trade negotiations cannot happen under threats.

So looking for a drop down towards that 7230 area today really, after a possible rally as far as 7330.

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