Quote from Nick on 20th July 2020, 10:00 am

FTSE 100 live outlook prediction analysis for 20th July 2020

Stock markets were mixed on Friday, with the FTSE 100 outperforming continental peers as a crunch meeting of the European Council aimed at thrashing out an EU-wide recovery deal got under way. It was a typically quiet Friday on the corporate front, and with little substantial economic news, there wasn’t much to drive investor sentiment in any direction. Here are some of the day’s main stories:

• Angela Merkel sound caution as crunch talks began over the EU’s proposed €750bn bailout plan. A decision isn’t expected immediately, with the potential for talks to drag out exacerbated by divisions between different parts of the bloc.
• The Government announced further plans to lift its lockdown measure. The new change include encouraging companies to send workers back into offices, where possible.

EU Deadlock
European Union efforts to agree on a 750 billion-euro ($856 billion) stimulus package appeared to be faltering late Sunday local time as leaders were unable to reconcile differences over how much of the recovery fund should be distributed through grants versus low-interest loans. European Council President Charles Michel floated a new proposal that would reduce the size of handouts to 400 billion euros, down from an original 500 billion euros, according to an official familiar with the discussions. Dutch Prime Minister Mark Rutte, joined by his Austrian, Danish and Swedish counterparts, rejected the new offer, and stood by a pledge to limit grants to 350 billion euros. Germany and France, with the backing of most of the bloc, are insistent that at least 400 billion euros of the package must be handouts in order to shield the fragile economies of southern Europe from the worst effects of the coronavirus pandemic. With investors already pricing in a deal after a series of bold announcements in recent weeks, leaders are under intense pressure to bridge their differences before financial markets open on Monday. [Bloomberg]

U.S. Cases Keep Rising
U.S. cases rose 2.2%, higher than the 1.9% daily average over the last week. The nation’s deaths from Covid-19 reached 140,369, according to data from Johns Hopkins University and Bloomberg. New York City is set for Phase Four reopening on Monday while Los Angeles Mayor Eric Garcetti warned that the city is on the brink of another stay-at-home order as new cases in California accelerated. Trump said — without evidence —that the U.S. has the “best mortality rate” as a poll gave Joe Biden a 15 percentage-point lead over the president. Trump played down rising coronavirus cases in the U.S., saying many people experience nothing more than “sniffles,” that positive tests are only up because of wider testing, and that the U.S. response is the “envy of the world.” Talks on the next coronavirus stimulus package will start at the White House on Monday. Beijing authorities lowered the city’s Covid-19 emergency response level after almost two weeks of no new domestic coronavirus infections.[Bloomberg]

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

Global stocks began the week in mixed fashion as investors braced for a ramp up in earnings reports and as the coronavirus continued to spread. The dollar pushed higher with Treasuries. Shares slipped in Australia and South Korea, and ticked higher in Japan and Hong Kong on below-average volumes. U.S. futures retreated and European contracts were little changed. Chinese stocks outperformed, with gains of more than 2.5%. The euro fluctuated as European Union leaders continued efforts to reach an agreement on a recovery package, with talks due to resume Monday afternoon. U.S. stocks had closed higher Friday, rounding out a third week of gains. The yen slid with the pound and Swiss franc. Crude oil declined.

The 2 hour coral support at 6225 held on Friday and we have had a decent rise from there. Out of hours the bulls tried to push past the 6300 level but we had a drop back before the current rise that we have as I write this. As such we look to be on a path towards the key fib at 6315, and just below R1 at 6324 for today. I am thinking that we may well see a reaction at this level and a drop back to re-test the pivot at 6275 would likely play out.

We will more than likely get another bull Monday though and a rise is on the cards as the bulls attempt to break the 3230 S&P resistance level for a push towards the 3266 level which is the next key one. That should pull the FTSE up to some higher resistance levels, with the 6363 level the next major one above the 6320 area. If the bulls surpass that then the top of the Raff channels are back in play, with the 20 day first up at 6424, and then the 10 day at 6468 though I am not expecting either of those today!

For the bears, if they break the 6265 level today then a drop down to Fridays low at 6225 would probably play out. Below that then the next main support is at the 6209 where we have the 25ema on the daily and untested since the bullish cross last week. Worth a go long at this level I am thinking, however should it break then a slide to 6129 is the next likely scenario, and that would upset the bulls apple cart. As long as the S&P remains bullish and if it breaks 3230 then it should keep the FTSE bullish too.

So, bit of a mixed bag to start the week and its eyes on the S&P really. That does look more bearish than the FTSE to start with on the shorter timeframes, but if it breaks 3230 then it may well change stance. Keep watching Fridays low (3204) as a break of that will likely see a slide down to 3165 where we have the bottom of the 10 day channel and possibly a false break of the 3170 main support level.  Below that then 3113 is the daily coral for the next support.

Good luck today, watching the 6265, 6225 for support, 6315, 6363 for resistance.

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