Friday feeling with rate cuts being mooted | FTSE100 7500 holds | SPX 3301 holds | 7590 7630 resistance

Friday feeling with rate cuts being mooted | FTSE100 7500 holds | SPX 3301 holds | 7590 7630 resistance

FTSE 100 live outlook prediction analysis for 24th January 2020

Global markets were plunged back into risk-off mode as the rapid spread of a deadly, Sars-like virus left investors rattled. European stock markets suffered widespread losses, while investors poured into havens such as the yen and gold.

In China, the CSI 300 – a benchmark index of the top Shenzen- and Shanghai-listed stocks – dropped by 3.1pc, its worst fall since August, after the epicentre city of Wuhan was put on lockdown in an attempt to prevent the coronavirus from spreading. Thursday marked the last day of trading before the country’s exchanges shut up shop for the Chinese New Year holidays, a period that includes extensive travelling.

The outbreak disrupted a tentative relief rally following the ratification of a phase one trade deal between the United States and China earlier this month. As part of the deal, Beijing agreed to clamp down on intellectual property theft and to make large agricultural purchases, in exchange for the removal of a punitive mutual tariff programme between the world’s two largest economies.

Markets Mixed
Asian stocks were mixed in a lackluster session as investors mulled updates on the deadly coronavirus outbreak. Oil steadied after its recent slide. U.S. stocks eked out a small advance helped by gains for big tech companies, and over in mainland China, markets are shut for a holiday. The yuan stayed lower and the yen held gains. Elsewhere, the euro weakened after policy makers suggested they will need to maintain ultra-loose stimulus settings for the foreseeable future. Oil remained under pressure amid concern the virus may dent energy demand.

Christine Lagarde’s inaugural move as European Central Bank president could presage the institution’s first hiatus in policy activism for years. While ECB officials will keep their ultra-loose stimulus settings — negative interest rates and monthly bond purchases — for the foreseeable future, a modest improvement in inflation pressures and a change of leadership have given them space to stop and assess their mission.

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

Been a bit of a turbulent week on the FTSE 100, finally dropping down to the 7500 support level yesterday, whereupon we saw a bounce as it neatly coincided with the S&P testing the 3301 support as well. Both have subsequently rallied and may well continue to do so into next week. However, for today we have initial resistance at the 7585/7590 area where there are a cluster of resistance levels.  The 200ema on the 30min sits at 7584 and looks like it will be tested today. Whilst on the 30min chart, we also have support at 7535 initially from a bullish coral line. If we get a test of this area (and also therefore a backtest of the 7530 (previous support then resistance, now support level) level we may well see this hold. This is also just below the daily pivot at 7544.

If the bears were to break below the 7530 level then a retest of the low yesterday at 7500 looks likely, and indeed we have the bottom of the 10 day Raff channel here again at 7498. The daily coral is also still at 7501. Below 7500 then S2 at 7471 is probably going to get hit, though there is a fib level at 7487 first. if they break 7500 I expect the momentum would carry it lower than 13 points below though.

For the bulls, a break 7590 will likely lead to 7620 or higher as we have R2 and a fib level here. If the bulls can maintain control today it bodes well for more bullishness next week, but for the moment the 2 hour chart is bearish and the bulls need to put in a decent performance to swing that around. That 7590 level looks fairly key, especially with the coral here. A strong cloys today puts them back in control though.

As it’s Friday it can be worth being slightly more cautious today. The Gold long is still running from yesterday with the stop now at 1558. It may well get stopped out if the bulls drive the indices higher today, but if not then a rise towards the 1580 level still looks possible, where we have the top of the 10 day Raff channel.

Good luck today and have a great weekend.

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