Quote from Nick on 23rd December 2020, 10:04 am

FTSE 100 live outlook prediction analysis for 23rd December 2020

Traders calmed their nerves on Tuesday to send markets back in the green, with the benchmark decisively rebounding in the late afternoon.
Markets had been spooked on Monday by the new coronavirus strain and no sign of progress on a trade deal between the UK and EU. While talks remain at a stalling point over the issue of fishing, markets shrugged off any negative Brexit sentiment and snapped up relatively cheaper stocks.

Meanwhile, fears the UK might be cut off due to the health crisis have somewhat calmed. And in positive news for the economy, the UK’s GDP grew more strongly than previously realised, by a record 16pc in the third quarter.

The FTSE 100 closed up 36.84 points to 6,453.16, recouping some of Monday’s 112.86-point loss. The domestically focused FTSE 250 had an even better day, ending up 258.61 points at 19,950.72.

New Strain

The new Covid-19 strain that emerged in the U.K. may already be in the U.S., Germany, France and Switzerland, officials in those countries said. Ireland imposed new restrictions to stem an “extraordinary growth” in cases, and said the nation should assume the new variant has arrived. Pfizer’s partner BioNTech is exploring options to boost vaccine production, and its chief executive officer said its shot will probably work against the new virus strain. Taiwan reported the first locally transmitted infection since April, ending what was the world’s longest stretch without a domestic case. Deaths are up in New York City.  Anthony Fauci, the U.S. government’s top infectious-disease doctor, received Moderna’s vaccine. Meanwhile, U.S. hospitals are being deluged, and Japan is grappling with its tense public history with vaccines.[Bloomberg]

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US & Asia Overnight from Bloomberg

U.S. and European stock futures declined, while Asian equities traded mostly higher after President Donald Trump said he is asking Congress to amend the pandemic aid legislation that was passed earlier this week. Treasuries ticked higher.

S&P 500 futures slipped, though pared losses. Just a day after Congress passed a $900 billion bipartisan relief package, Trump demanded that lawmakers increase the stimulus checks due to go out to most Americans to $2,000 from $600. Investors also continued to assess the vaccine rollout as a new virus variant is leading to more severe lockdowns. Gold climbed while crude oil retreated. Chinese shares outperformed.

Fresh jitters are creeping into a global stock rally that was already looking more fragile after equities touched a record high last week. The president’s comments cast doubt on how long it will take for the spending package to become law and for the money to be distributed to Americans.

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

The S&P has defended a bit overnight and has seen a decent hold of the 3660 support level, just above the retest the 25ema on the daily. As such, if that holds then it keeps alive a further test of the 3700 resistance level where we have the 2h coral line. The bulls will of course be trying to end the year strongly as we have the pre holiday chop still playing out. If the bears can break 3660 then a retest of Mondays lows is likely at 3610. On the upside, if the bulls can break 3700 then another test of the 3730 level is likely.

Onto the FTSE and I would like to see the daily pivot hold initially at 6434. We have also climbed off the overnight lows, and on the good news front the opening of the Dover-Calais route.  France will allow some traffic from the UK back into the country from Wednesday after the nations reached an agreement over their border, which was closed amid concerns over a new variant of COVID-19. It comes after thousands of lorries were seen queued up on Tuesday hoping to cross the Channel. Admittance into France will be granted to those travelling for urgent reasons, including hauliers, French citizens, and British citizens with French residency. Travellers must be able to produce a recent negative COVID-19 test.

If the bears were to break below the 6434 level this morning though, then a test of the 2h 6422 Hull moving average is likely, though it would be another test as its this that held overnight. Below this then S1 at 6402 would be the next support of note. That said, 6433 is also the 25ema on the daily and that line is holding ok at the moment.

For the bulls they will be looking to break the 6470 level where we have the 200ema and then 6482 where we have a key fib for today. 6470 is just above the red coral on the 2h chart, currently at 6463, though its a positive sign for the bulls that we have a bullish set up on the 2h moving averages. Ideally they will want to get the price above the 6499 R1 resistance level, and the round number 6500. If the S&P can push on today then it may well drag the FTSE up with it, especially if we see a break of the 3700 level.

The ASX200 had a fairly flat choppy day and we may well do something similar, Brexit deal news notwithstanding.

Good luck today and enjoy your break.

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