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NFP Friday with 175k forecasted | First UK casualty from Coronavirus | 6533 support |6640 6710 resistance

#1 · 6th March 2020, 10:05 am

Quote from Nick on 6th March 2020, 10:05 am
FTSE 100 live outlook prediction analysis for 6th March 2020
After a flicker of gains at the open, the FTSE 100 performed poorly throughout the rest of the session, performing broadly in line with continental peers despite pressure from a rising pound. The biggest fallers on the FTSE 100 were a familiar assortment on names seen as bearing the brunt of the disruption caused by the outbreak: miners and travel groups were among the worst performers. London's benchmark index closed at 6,715.04 today, a fall of 1.48pc while the wider FTSE 250 tumbled 2.10pc to 19,328.69. In the eurozone the Paris CAC fell 1.90pc and the Frankfurt DAX closed 1.541pc lower.
Goldman Sachs estimates UK GDP will not grow at all in the opening three months of the year and could shrink by 0.2pc in the second quarter – coming to within a hair’s breadth of a recession, defined as two consecutive quarters of contraction. “We expect the coronavirus outbreak to push the UK economy to the brink of recession in coming months,” said economist Sven Jari Stehn at the investment bank. “Our estimates point to a substantial hit to growth in coming months. The UK is highly exposed to global activity, tourism exports are significant and the virus is spreading steadily within the UK.” He expects the Bank of England to cut interest rates from 0.75pc to 0.25pc in this month’s Monetary Policy Committee meeting, and for next week’s Budget to include a focus on public health measures.
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FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The bears got back into the fight yesterday with the drop off 6840 and we are now back at the 6600 level ahead of the Non Farm Payrolls data out later. The NFP forecast is 175k versus 225k previously. Logic would suggest that traders wouldn't want to be holding longs ahead of the weekend, however last Friday did see a strong bounce so we cant rule anything out. Over night the S&P has dropped down to the 2976 support level and while I have been writing this email we have seen a decent bounce off that support level. The bulls will be keen to recapture 3000, especially as that opens up a possible trip to the 2 hour resistance at the 3060 level. That would have an effect on the FTSE 100 as well, and we will may see a climb towards the 6715 resistance level on its 2 hour chart. All hinges on supports holding though!
Initial support today is at the S1 level 6542 and we also have some daily support just below this at 6533 so we may well see bounce here if we were to continue the slide from yesterday initially at the open. That said the bulls will be keen to get the price back above 6600 to start with today. Should the bears break below 6530 then I imagine that we will retest the recent lows at 6460 - and a break of that still shows 6250 as the next major level of support. Quite the drop from the recent 7500 area!
For the bulls, they will be keen to get a rise going to the 2 hour resistance at 6715 as mentioned. Above this then 6740 is next up, with the top of the 10 day Raff channel at 6840 above that. Seems a big ask for today though, but NFP, stimulus, change in the news flow might well see a meteoric rise play out. Feels doubtful though!
Gold continued its rise and will shortly see a double top with the recent high (rate cut spike high level) at 1689. We might see some volatility on gold today depending on NFP news at 1330.
So for the FTSE today, looking at 6535 as support initially, and 6650 then 6715 as resistance for today. Be slightly cautious as its NFP Friday with a pretty pessimistic back drop (so don't rule out a rally!). Have a great weekend.
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FTSE 100 live outlook prediction analysis for 6th March 2020

After a flicker of gains at the open, the FTSE 100 performed poorly throughout the rest of the session, performing broadly in line with continental peers despite pressure from a rising pound. The biggest fallers on the FTSE 100 were a familiar assortment on names seen as bearing the brunt of the disruption caused by the outbreak: miners and travel groups were among the worst performers. London's benchmark index closed at 6,715.04 today, a fall of 1.48pc while the wider FTSE 250 tumbled 2.10pc to 19,328.69. In the eurozone the Paris CAC fell 1.90pc and the Frankfurt DAX closed 1.541pc lower.

Goldman Sachs estimates UK GDP will not grow at all in the opening three months of the year and could shrink by 0.2pc in the second quarter – coming to within a hair’s breadth of a recession, defined as two consecutive quarters of contraction. “We expect the coronavirus outbreak to push the UK economy to the brink of recession in coming months,” said economist Sven Jari Stehn at the investment bank. “Our estimates point to a substantial hit to growth in coming months. The UK is highly exposed to global activity, tourism exports are significant and the virus is spreading steadily within the UK.” He expects the Bank of England to cut interest rates from 0.75pc to 0.25pc in this month’s Monetary Policy Committee meeting, and for next week’s Budget to include a focus on public health measures.

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

The bears got back into the fight yesterday with the drop off 6840 and we are now back at the 6600 level ahead of the Non Farm Payrolls data out later. The NFP forecast is 175k versus 225k previously. Logic would suggest that traders wouldn't want to be holding longs ahead of the weekend, however last Friday did see a strong bounce so we cant rule anything out. Over night the S&P has dropped down to the 2976 support level and while I have been writing this email we have seen a decent bounce off that support level. The bulls will be keen to recapture 3000, especially as that opens up a possible trip to the 2 hour resistance at the 3060 level. That would have an effect on the FTSE 100 as well, and we will may see a climb towards the 6715 resistance level on its 2 hour chart. All hinges on supports holding though!

Initial support today is at the S1 level 6542 and we also have some daily support just below this at 6533 so we may well see bounce here if we were to continue the slide from yesterday initially at the open. That said the bulls will be keen to get the price back above 6600 to start with today. Should the bears break below 6530 then I imagine that we will retest the recent lows at 6460 - and a break of that still shows 6250 as the next major level of support. Quite the drop from the recent 7500 area!

For the bulls, they will be keen to get a rise going to the 2 hour resistance at 6715 as mentioned. Above this then 6740 is next up, with the top of the 10 day Raff channel at 6840 above that. Seems a big ask for today though, but NFP, stimulus, change in the news flow might well see a meteoric rise play out. Feels doubtful though!

Gold continued its rise and will shortly see a double top with the recent high (rate cut spike high level) at 1689. We might see some volatility on gold today depending on NFP news at 1330.

So for the FTSE today, looking at 6535 as support initially, and 6650 then 6715 as resistance for today. Be slightly cautious as its NFP Friday with a pretty pessimistic back drop (so don't rule out a rally!). Have a great weekend.

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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