Quote from Nick on 23rd July 2020, 10:17 am

FTSE 100 live outlook prediction analysis for 23rd July 2020

Here's a quick summary of what happened yesterday:

• The FTSE 100 closed in the red as the hopes of a Brexit trade deal appear to be fading
• Wall Street climbed for a fourth consecutive day as investors weighed the likelihood for a new spending bill, potential coronavirus vaccines and an escalation of tensions between the US and China
• Markus Braun, the former Wirecard chief executive, was arrested for second time in Germany
• B&Q owner Kingfisher were helped by a DIY boom during lockdown
• Burrito chain Chilango set to appoint administrators
• RBS was officially renamed NatWest Group

The FTSE 100 closed at 6209.60, down 0.96%, while the Dax was off 0.53%.

Beijing Retaliates

China vowed retaliation after the U.S. forced the closure of its Houston consulate, in one of the biggest threats to diplomatic ties between the countries in decades. The U.S. government gave China three days to close its consulate in America’s fourth-most populous city in an “unprecedented escalation,” Foreign Ministry spokesman Wang Wenbin said Wednesday in Beijing. China planned to “react with firm countermeasures” if the Trump administration didn’t “revoke this erroneous decision,” Wang said. The State Department said it ordered the consulate shut “to protect American intellectual property and Americans’ private information,” without giving more details. At least two Chinese citizens have been convicted of stealing energy industry trade secrets in Houston in recent years. The consulate is one of five China maintains in the U.S. along with its embassy in Washington. The move to close it is a severe diplomatic blow to a relationship already under strain, and will likely lead to a smaller U.S. footprint in China.

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

Stocks were mixed on Thursday amid concern over renewed Sino-U.S. tensions and uncertainty over the timing of a new American stimulus package. The dollar dipped to near the weakest since March. Shares in China and South Korea underperformed. Equities in Hong Kong edged up, after news of the U.S. ordering China’s Houston consulate to shut hit stocks late on Wednesday. The offshore yuan nudged higher. Contracts on the S&P 500 were flat after the gauge earlier rose to a five-month high. Shares of Microsoft Corp. dropped and Tesla Inc. surged in after-hours trading. Japan is closed Thursday and Friday for holidays.

The bulls defended the 6200 last night after the bell, though we haven't really pulled away from it much so far. The backdrop is turning a bit negative but the S&P is still holding on for the moment, and may well still manage the 3303 resistance level before too long. That has meant that the FTSE 2 hour chart is still bearish, and we now have the coral changing to red and resistance from that at 6280 for today. However we have the key fib and the R1 level at the 6260 level to start with and we may well see the bears appear here this morning, if we get an initial push up today.

Initial support is at the 6180 level where we have a fib level and also just above S1 which is at 6176. The bulls will be keen to keep (or get the price back above) the 6200 level and will be trying to defend the dips for the moment, though if you looked at gold you would think that the flight to safety is in full effect. I have gone for an initial dip down to this level to start with today but then some more upside towards that 6260 and possibly the 6280 resistance level. However, the 6200 level is still support so we may not get an opening dip. The daily chart does remain bullish for the moment (just), though we have dipped below the 25ema last night which was at 6210. The coral is also support and has held overnight at 6191.

If the bulls can break 6280 then we may well be back on the bullish leg up, however we have the bottom of the 10 day Raff channel getting closer at the 6125 level. Should we get a test of this then a long here is worth a go. The top of the Raff channels remain at the 6460 area for the moment. A bullish S&P up to and possibly past the 3303 level would likely see the FTSE 100 rise to those sort of levels. On the longer timeframes its still buy the dip but with the drop down from the 6320 level the bears are certainly taking their chances.

So, bit of a mixed bag today, the 6200 to 6320 range is still in play for the moment, but looking at 6180 and then 6125 as the main supports, with 6260, 6280 and 6320 as the main resistance levels. Best plan is to wait for the market to come to the identified levels today. Good luck today.

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