Quote from Nick on 28th March 2019, 11:05 am

28th March 2019

The pound has fallen against the euro and the dollar after none of the eight proposed options for Brexit received a majority. Britain’s political standoff over Brexit escalated further, with even Theresa May’s announcement that she’ll quit as prime minister doing nothing to move closer to a resolution. It leaves the country entering another critical 48 hours after Parliament signaled it’s more willing to back a softer departure from the European Union or even another referendum than the deal struck by May after two years of negotiations. But those options also don’t command majority support.

No Majority for Any Brexit Option

The British voted on alternatives to Prime Minister Theresa May’s Brexit deal — and rejected all of the proposed models. The pound retreated. Earlier, May promised to resign from the leadership if her Conservative Party colleagues drop their opposition to her Brexit strategy and vote to ratify her deal. There were early signs that May’s dramatic gamble could pay off. Several pro-Brexit Tories — including Boris Johnson and Iain Duncan Smith — told colleagues they will back down and support the divorce agreement, according to people familiar with the matter. If she succeeds in persuading a majority of members of Parliament to vote through her accord — potentially as early as Friday — it will represent one of the biggest political come-backs in recent British history.

More Signs of a China Recovery

China’s economy is showing further signs of recovery after months of slowdown, according to a Bloomberg Economics gauge that aggregates the earliest available indicators on market sentiment and business conditions. There’s optimism about the state of the economy thanks to news that the U.S. and China may be nearing a trade deal, although the outlook for global commerce is still grim. Stocks and smaller business sentiment have improved as the government directs credit toward smaller businesses and this month announced the biggest tax reduction on record. On Wednesday, the China Beige Book showed “an unmistakable first-quarter recovery” after a weak end to 2018, though the level of new borrowing casts doubt on the sustainability of the rebound.

US Stocks Fall, Dollar Climbs

Treasury 10-year yields declined to the lowest level since December 2017, and rates on benchmark German bunds sank further below zero after European Central Bank President Mario Draghi said an accommodative stance is still needed. Energy companies in the S&P 500 Index joined a slide in oil, while industrial shares gained. Traders piled into bonds amid concern about a slowdown in global growth. Recent data showed weakness from U.S. housing to retail sales and consumer sentiment, prompting a more dovish tone from the central bank.

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FTSE 100 Trading Signals, Forecast and Prediction

With still no way forward on the Brexit deal with the vote yesterday, cable will once again be in the driving seat and control the FTSE100. As such, cable is likely to drop which in turn should see the FTSE rise today. Indeed, the Australian market had a strong session today and we may well follow suit. Overnight we have held up pretty well, remaining above 7200, and the 30min coral has now gone green, coinciding with the daily pivot for support at 7195. I am thinking that if we get an initial dip down to this area we may well then see a bounce from there. The bulls will be keen to target the 7300 level again, and one of my longer term forecasting models has just updated to show a possible rise towards 7500.

[caption id="attachment_14689" align="aligncenter" width="821"] FTSE 100 Trading Signals, Forecast and Prediction[/caption]

If the bulls do break above the 7210 area where we have initial resistance from the 200ema on the 30min chart, then the fib at 7240 may see a bit of a stutter. Breaking that will likely see the the R2 level at 7265.

On the bearish side, if they break 7195 then a trip to yesterdays lows around the 7160 level and the fib at 7144 look likely. The 2 hour chart remains bullish for the moment, and if the price were to stay above the 7195 area we should get a green coral on that, which will show support at 7195ish as well.

Having tested the bottom of the Raff channel at the 7160 area yesterday and held that, we continue to see a rising 20 day channel, with support at 7145 as well.  If we were to drop this low today then a long here is worth a go.

I am sure the media will be full of speculation and what happens next scenarios after the vote yesterday. There may well even be a general election again soon! Meanwhile there is also speculation that the Fed will likely cut interest rates. Continues to be tricky to call, but being back above 7200 bodes well for the bulls. Dip and rise again I am thinking. Good luck today.

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