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Labor Day US holiday | slow rise today buy the dip | 7115 7099 support | 7155 7192 7209 resistance

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

A surge in Covid cases driven by the delta variant slammed the brakes on the US jobs recovery in August, piling further pressure on Joe Biden. The US dollar and stocks sank after just 235,000 jobs were added to the world’s largest economy in the weakest month of growth since January.

The reading from the Bureau of Labor Statistics was well below the 750,000 expected by Wall Street and suggested America’s jobs recovery is close to stalling again. Unemployment continued to fall, dropping from 5.4pc to 5.2pc, but the figures will concern the White House as another wave of Covid cases lets rip.

FTSE 100 live outlook prediction analysis for 6th September 2021

The US markets are closed for Labor Day so we could have a slightly slower day on the FTSE100 today. The bulls defended the news driven drop down to the daily support at 7120 on Friday and we have had a slow move up towards the 2h resistance at 7155. To start with the bulls will be keen to break above this level as we also have a cluster of 30m resistance levels here, namely the daily pivot, the coral and the 200ema.

If the bulls manage to break above this 7155 then we should get a rise towards the 7175 R1 level, but also the strong resistance level at 7192 where we have the key fib and just above the daily level at 7185. The bulls failed to break above this level on Friday too and we dropped from 7181.

We may well get some profit taking a bit of a reaction at this level, though a move above that will likely lead to the 7220 level (the recent high) and also just above the 10 day Raff channel which is at 7210 currently.  Talking of the 10 day channel that band has narrowed somewhat recently, but is still heading up, so the bullish trend remains intact. Sometimes we do get the bearishness kick in mid-September though so bear that in mind, with a seasonal drop then. Buy the dips still working well though for the moment.

For the bears they will be looking to break it down again and initially will be looking at that 7120 level again. A break of that and 7099 is the key fib and the round number though we have S2 just below this at 7088. However, the bottom of the 10 day Raff channel is at 7103 (as mentioned above its got a lot narrower) so we could see a break of that channel one way or the other soon.

Below that 7090 area then we have 7075 daily support next in play, and I would like to see that hold if tested, otherwise the bears will be looking to take it down towards 7000 again. I am not expecting us to slide too much today though and would expect we get a sloe bullish Monday.

Rise Dip Rise pattern may well play out today.

Good luck today.

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Asian Session

Asian stocks rose Monday amid an ongoing rally in Japan sparked by the planned exit of the prime minister and as traders mulled slower U.S. hiring that may delay a reduction in Federal Reserve stimulus.

MSCI Inc.’s Asia-Pacific gauge climbed for a seventh session, the longest streak since January. Japan was up more than 1% to a 31-year high on hopes of better pandemic management and more spending by Prime Minister Yoshihide Suga’s successor.

U.S. equity futures fluctuated. The S&P 500 was little changed Friday, the Nasdaq 100 edged up to a record and Treasury yields rose as investors digested disappointing U.S. payroll growth and faster-than-projected wage increases. U.S. markets are closed Monday for the Labor Day holiday and there is no Treasuries cash trading.

Aluminum extended its surge on political unrest in Guinea, which fueled concerns over supply of the raw material needed to make the metal. Australia’s dollar slid as rising virus cases stoke questions about whether the central bank will delay a plan to taper bond purchases. A gauge of the U.S. dollar ticked up.

The U.S. economy added 235,000 jobs in August -- the smallest gain in seven months -- as the delta virus variant spread. The soft report seems likely to prompt Fed policy makers to delay considering a move to scale back asset purchases at their September meeting. It also points to a challenging period of slower economic reopening and elevated price pressures. [Bloomberg]

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