Quote from Nick on 1st April 2019, 9:46 am

1st April 2019

The pound has tumbled below the $1.30 mark versus the dollar after a third defeat for Theresa May's deal deepened the Brexit crisis. Sterling extended its slide at the end of its worst week against its rival in 2019 as the prime minister called the implications of the latest setback "grave". It ended another turbulent week sinking 0.6pc at $1.2993 against the dollar, dropping to its lowest level in more than two weeks.

There are no signs of the gridlock in Westminster impacting stock markets yet. The FTSE 100 and FTSE 250 have gained 0.7pc and 1.1pc, respectively, as global markets rally.

Fresh signs of distress are surfacing in emerging markets, threatening a return of last summer’s crisis that rattled investors.
Another standoff between Turkish president Recep Tayyip Erdogan and markets has forced investors to grab protection from debt default, and Turkish nationals to seek safety in foreign currencies.

China’s Factory Rebound

China’s first official economic gauge for March signaled a stabilization in the world’s second-largest economy, easing one of the biggest worries for the global outlook. The manufacturing purchasing managers index rose to 50.5 from 49.2 last month, the biggest increase since 2012 and exceeding all estimates by economists. That’s good news for global investors, as China’s weakening demand had weighed on sectors such as auto producers and commodity exporters worldwide. However, there is still a way to go — tariffs and uncertainty about whether a deal with the U.S. will be signed are weighing on trade and there is no sign yet of a rebound in domestic consumption

Market Open

Asian stock futures rose after U.S. equities closed out their strongest quarter since 2009 on a high note. Ten-year Treasury yields ended Friday above 2.40 percent after plunging earlier in the week. The dollar ended last week mostly weaker, though up against the yen. Oil jumped while gold's advance was modest. The Turkish lira dropped as the market digested the implications of the elections. Traders will be on alert this weekas U.S.-China trade talks resume when Vice Premier Liu He leads a delegation to Washington, days after negotiations in Beijing, and Britain’s Parliament tries again to adopt a Brexit withdrawal deal. The Reserve Bank of Australia has a monetary policy decision and the country also hands down its federal budget. The U.S. March employment report will be the focal point at the end of the week.

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FTSE 100 Trading Signals, Forecast and Prediction

For today I am thinking that the strength from last week will carry though and we are on for another dip and rise session. There is initial resistance at the 7330 area so we might well see a stutter here, and then a drop back to close the gap at 7291 with Friday evening's close price. The official close was 7280 so I have put the stop on my long just below this. If this area holds then I am ultimately looking for a rise towards the 7370 area today, where we have daily resistance. There is also a key fib level here for today. The 20 day Raff channel remains positive, as does the 2 hour chart and as such, despite the Brexit chaos backdrop, the FTSE 100 remains bullish. In no small part helped by cable of course, which is hovering around the 130 mark at the moment.

[caption id="attachment_14695" align="aligncenter" width="821"] FTSE 100 Trading Signals, Forecast and Prediction[/caption]

If the bears were to break below the 7280 level today then a drop down to 7216 looks possible, where we have the green 2 hour coral line. I would expect this area to be decent support though and probably worth taking a long here if it were to get that low today. Below this then 7192 is S3. If it gets really bearish then 7139 and 7049b are still in play.

Regarding Brexit, we may well see another vote on the deal, possibly a general election, possibly then a new PM that was part of the Leave campaign, probably something else - its a pretty chaotic mess and the next two week will likely see more pound volatility. General rule of thumb, if the pound goes down the FTSE100 goes up and vice versa so bear that in mind while all this is going on.

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