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Brexit talks to continue as deadline passes | 6560 6605 6640 6656 resistance | 6514 6471 support

#1 · 14th December 2020, 9:58 am

Quote from Nick on 14th December 2020, 9:58 am
FTSE 100 live outlook prediction analysis for 14th December 2020
Friday saw troubled negotiations between the UK and EU taking centre stage, with a risk-off mood gripping markets after leaders on both sides warned that a no-deal outcome looks increasingly likely. European stocks dropped, and the pound fell as much as 1.2pc, touching a near four-week low.
Amazon.co.uk Widgets
A weak showing for London’s listed lenders dragged on the FTSE 100, despite upbeat news in the banking industry after it emerged that dividend payments are back on and UK lenders can take £200bn in loan losses and keep lending. Worries about the size of any payout, and a broader Brexit risk, led Lloyds, Barclays and NatWest to all slide. Internationally focused HSBC and Standard Chartered suffered less severe drops.
Morgan Stanley analyst Graham Secker said UK lenders could fall between 10pc and 20pc if the UK fails to secure a trade deal with the EU before the end of the month. They said the insurance, real estate and home-building sectors were also at risk from such an outcome.
The analysts said the FTSE 250 would drop 6pc to 10pc without a deal, while the FTSE 100 would be comparatively shielded by a sharp depreciation in the pound.
More Talks
The pound rose after the U.K. and the European Union said they will continue talking about a trade agreement, keeping hopes for a late deal alive. U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to go the “extra mile” and keep working on a post-Brexit accord. The duo had earlier said that negotiators had until Sunday to come up with a deal.
Strong Yuan
The unrelenting pace of inflows heading for China’s bonds and stocks has one yuan bull predicting the currency could strengthen to a level not seen in nearly three decades. A “flood” of foreign cash will chase yuan-denominated assets in 2021 because they’ll offer far better yield than the rest of the world, according to Liu Li-gang, chief China economist at Citigroup. He predicts the currency could rally 10% to 6 per dollar — or even more — by the end of next year. The yuan hasn’t been that strong since late 1993, just before China’s unification of official and market exchange rates triggered a plunge in the currency.
Pandemic Bill
Senator Joe Manchin, a West Virginia Democrat, said on Fox News Sunday that lawmakers will “have a bill produced for the American people tomorrow, $908 billion.” Democratic and Republican lawmakers engaged in the talks have said they completed detailed proposals on small business help, vaccine-distribution funding and other key areas. The sticking point is how to shield employers from virus-related lawsuits, a top demand of Senate Majority Leader Mitch McConnell.[Bloomberg]
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US & Asia Overnight from Bloomberg
U.S. and European equity futures climbed along with Asian shares as investors took some comfort from further stimulus bill negotiations and the impending deployment of the first vaccine in the U.S. The pound advanced after Brexit talks were extended past a Sunday deadline.
S&P 500 futures gained about 0.5%, with the first deliveries of the Pfizer Inc.-BioNTech SE vaccine in the U.S. due to arrive Monday morning. Meantime, a bipartisan group of lawmakers will unveil a $908 billion pandemic relief bill the same day, although there is “no guarantee” Congress will pass it, a key negotiator said. The dollar dipped and Treasury yields were steady.
Sterling pared some early gains but remained firmer against the dollar. The U.K. and European Union said they will continue talking about a trade agreement, raising hopes of a deal. In Asia, improving business confidence helped Japanese stocks rally to a more than two-year high earlier Monday. Elsewhere, the offshore yuan outperformed.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Oh what a surprise, the hard deadline has been moved back as agreement still cannot be reached on the Brexit front. However the likelihood of no deal still remains though cable rose nicely on the news from yesterday, gapping up back to the 13350 level. That did weigh on the start of the FTSE 100 futures, though we have held above Fridays lows (yet another test of the 6520 level). It looks like we will be on for a bullish Monday again though, and we got the Friday afternoon ramp on the US markets, and today sees US approval for the Pfizer vaccine, along with the stimulus bill looking like its coming. More upside till the New Year looks set to play out.
To start with we have a cluster of resistance at the 6560 level with the daily pivot, 200ema and 30m coral here, so we may well see a dip and rise play out initially. The S&P will be keen to finally break above the 3685 level as we have the 2h coral (red) here and if they do manage that it opens up a rise back above the 3710 level. We may well see a dip and rise play out on the S&P today as well.
If the bulls break 6560 then we are looking at the 6602 to 6610 level as the next major level of resistance and with the key fib and R1, along with our own 2h coral (also red) at 6602 we could see a reaction here, for a back test of the 6560 level. Above this 6656 is R2 and then 6697 on the daily, but I am not expecting us to get that high today! That said, we also have 6640 as the most recent high from last week - so start to fade out of longs at around this level and just below that R2. Likewise if we start to turn there it will be worth hopping on the bearish side.
For the bears, they will be looking to break that 6520 level this morning but with S1 and the key fib just below at 6515 it might be a big ask. Especially as the US is being hit with some positive news likely to drive it higher. Feels like a buy the dip day across the board today.
Should we get below 6515 then 6470 is the next main level of support and R2 here. That would also be a break below the rising 10 day Raff channel and would certainly upset the apple cart a bit too. I still remain bullish for December at the moment.
Good luck today, watching 6515, 6471 as support. 6560, 6602 and 6640 as resistance.
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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.
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FTSE 100 live outlook prediction analysis for 14th December 2020

Friday saw troubled negotiations between the UK and EU taking centre stage, with a risk-off mood gripping markets after leaders on both sides warned that a no-deal outcome looks increasingly likely. European stocks dropped, and the pound fell as much as 1.2pc, touching a near four-week low.
Amazon.co.uk Widgets
A weak showing for London’s listed lenders dragged on the FTSE 100, despite upbeat news in the banking industry after it emerged that dividend payments are back on and UK lenders can take £200bn in loan losses and keep lending. Worries about the size of any payout, and a broader Brexit risk, led Lloyds, Barclays and NatWest to all slide. Internationally focused HSBC and Standard Chartered suffered less severe drops.

Morgan Stanley analyst Graham Secker said UK lenders could fall between 10pc and 20pc if the UK fails to secure a trade deal with the EU before the end of the month. They said the insurance, real estate and home-building sectors were also at risk from such an outcome.

The analysts said the FTSE 250 would drop 6pc to 10pc without a deal, while the FTSE 100 would be comparatively shielded by a sharp depreciation in the pound.

More Talks

The pound rose after the U.K. and the European Union said they will continue talking about a trade agreement, keeping hopes for a late deal alive. U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to go the “extra mile” and keep working on a post-Brexit accord. The duo had earlier said that negotiators had until Sunday to come up with a deal.

Strong Yuan

The unrelenting pace of inflows heading for China’s bonds and stocks has one yuan bull predicting the currency could strengthen to a level not seen in nearly three decades. A “flood” of foreign cash will chase yuan-denominated assets in 2021 because they’ll offer far better yield than the rest of the world, according to Liu Li-gang, chief China economist at Citigroup. He predicts the currency could rally 10% to 6 per dollar — or even more — by the end of next year. The yuan hasn’t been that strong since late 1993, just before China’s unification of official and market exchange rates triggered a plunge in the currency.

Pandemic Bill

Senator Joe Manchin, a West Virginia Democrat, said on Fox News Sunday that lawmakers will “have a bill produced for the American people tomorrow, $908 billion.” Democratic and Republican lawmakers engaged in the talks have said they completed detailed proposals on small business help, vaccine-distribution funding and other key areas. The sticking point is how to shield employers from virus-related lawsuits, a top demand of Senate Majority Leader Mitch McConnell.[Bloomberg]

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US & Asia Overnight from Bloomberg

U.S. and European equity futures climbed along with Asian shares as investors took some comfort from further stimulus bill negotiations and the impending deployment of the first vaccine in the U.S. The pound advanced after Brexit talks were extended past a Sunday deadline.

S&P 500 futures gained about 0.5%, with the first deliveries of the Pfizer Inc.-BioNTech SE vaccine in the U.S. due to arrive Monday morning. Meantime, a bipartisan group of lawmakers will unveil a $908 billion pandemic relief bill the same day, although there is “no guarantee” Congress will pass it, a key negotiator said. The dollar dipped and Treasury yields were steady.

Sterling pared some early gains but remained firmer against the dollar. The U.K. and European Union said they will continue talking about a trade agreement, raising hopes of a deal. In Asia, improving business confidence helped Japanese stocks rally to a more than two-year high earlier Monday. Elsewhere, the offshore yuan outperformed.

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

Oh what a surprise, the hard deadline has been moved back as agreement still cannot be reached on the Brexit front. However the likelihood of no deal still remains though cable rose nicely on the news from yesterday, gapping up back to the 13350 level. That did weigh on the start of the FTSE 100 futures, though we have held above Fridays lows (yet another test of the 6520 level). It looks like we will be on for a bullish Monday again though, and we got the Friday afternoon ramp on the US markets, and today sees US approval for the Pfizer vaccine, along with the stimulus bill looking like its coming. More upside till the New Year looks set to play out.

To start with we have a cluster of resistance at the 6560 level with the daily pivot, 200ema and 30m coral here, so we may well see a dip and rise play out initially. The S&P will be keen to finally break above the 3685 level as we have the 2h coral (red) here and if they do manage that it opens up a rise back above the 3710 level. We may well see a dip and rise play out on the S&P today as well.

If the bulls break 6560 then we are looking at the 6602 to 6610 level as the next major level of resistance and with the key fib and R1, along with our own 2h coral (also red) at 6602 we could see a reaction here, for a back test of the 6560 level. Above this 6656 is R2 and then 6697 on the daily, but I am not expecting us to get that high today! That said, we also have 6640 as the most recent high from last week - so start to fade out of longs at around this level and just below that R2. Likewise if we start to turn there it will be worth hopping on the bearish side.

For the bears, they will be looking to break that 6520 level this morning but with S1 and the key fib just below at 6515 it might be a big ask. Especially as the US is being hit with some positive news likely to drive it higher. Feels like a buy the dip day across the board today.

Should we get below 6515 then 6470 is the next main level of support and R2 here. That would also be a break below the rising 10 day Raff channel and would certainly upset the apple cart a bit too. I still remain bullish for December at the moment.

Good luck today, watching 6515, 6471 as support. 6560, 6602 and 6640 as resistance.

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

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