Quote from Nick on 18th December 2019, 9:31 am

FTSE 100 live outlook prediction analysis for 18th December 2019

The pound tumbled further from the 13500 level during yesterday's session as Boris Johnson announced plans to enshrine the Brexit deadline in law. The news increased concern about the possibility of a no-deal Brexit, sending the domestically-focused FTSE 250 tumbling more than 1pc.

The FTSE 100 managed to close in positive territory in the end, cushioned by a falling pound. It edged up 0.08pc to 7,525.28 while the domestically-focused FTSE 250 tumbled 1.05pc to 21,690.20. In the eurozone both the Paris CAC and Frankfurt DAX ended in the red, falling 0.39pc and 0.89pc respectively.

Festive Cheer

While plenty of investors remain skeptical about the fine print of the U.S.-China trade deal and fret over the sustainability of the American economic expansion, bulls are taking control. As a Bank of America Corp. index of financial stress plunges to May lows, volatile shares are trumping safer equities that offer smaller price swings. Cheaper stocks are getting snapped up and money is rushing into emerging markets anew. Thank fresh bets on global trade, a U.S. labor market in robust health and a dovish Federal Reserve ironclad in its reflationary resolve. All that is spurring the likes of JPMorgan Chase & Co. to tout new bullish trades, and Bank of America Corp. to project a “melt-up” next quarter. In a year when valuations for defensive assets soared, Wall Street is now lavishing the riskier laggards with festive cheer. “For the next six months you need to have a more positive view,” said Francois Savary, chief investment officer at Prime Partners SA.

Markets Mixed

Asian stocks were set to open mixed Wednesday as investors take a breather after the partial U.S.-China trade deal that sent global equities close to record highs, while the dollar gained and 10-year treasuries were steady. Futures were little changed in Japan, fell in Australia and climbed in Hong Kong. The S&P 500 Index closed just one index point higher at a new record amid positive U.S. factory and construction data, and investors continue to watch the details of the U.S.-China trade accord, as well as keeping an eye on the improving global economy and the path ahead for monetary policy in 2020. The pound dropped the most in a month as concerns about a no-deal Brexit resurfaced. Elsewhere, West Texas intermediate crude briefly touched $61 a barrel for the first time in three months as strengthening outlooks for manufacturing and trade buoyed demand prospects. Bitcoin’s woes continued, as the digital currency languished below $7,000.

(adsbygoogle = window.adsbygoogle || []).push({});

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

It looks like we might see a bit more bearishness today, as the FTSE has failed to break the 7540 level. The bears need to break the 7495 level though really as 7500 was support yesterday for a couple of tests and also we have S1 at 7495 today. If they were to break below this then we should see a drop down towards the 7471 level for a test of S2, and also the 2 hour coral line. This is rising steadily, and at the time of writing is at 7459 but may well coincide with 7470 later on this morning. I am still thinking that a dip down to test the daily 25ema support level, currently at 7338 is possible before a rally back up again to close out the year (as it's rising then 7400 maybe). We shall see.

[caption id="attachment_15360" align="aligncenter" width="821"] FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis[/caption]

If the bulls were to break above the 7553 level (this is now the 2 hour resistance level) after crossing to bear following the fairly flat session yesterday, then we will likely see a rise towards the 7650 or higher level to test the top of the 10 day Raff channel. That said, I think we will see a bit of a dip today as the focus is now back on Brexit and Trade and those that are long will be keen to bank some profit after the "Boris bounce".

I would also quite like to see the S&P dip down to test the 3173 gap level from Friday, and the bulls failed to test the 3200 level so far this week. However, it is sitting on the 2 hour coral support as I write at 3188 so we may see this holding initially.

Not much more to say really, watching the 7495/7500 level for support with 7471 below that. For resistance, 7530, 7560 and then the 7650 level - though I don't think we will get that high today.

Recommended 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 and Live Trading

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

Keep up to date with new content, free sign up below

[yikes-mailchimp form="4"]