FTSE 100 outlook and live trading | 7200 7220 7280 resistance | 7140 7120 7090 support | FTSE 100 live analysis

Tories storm to a big majority | 7415 resistance after an initial relief rally today | Cable holds 13500 | 7300 7270 support

FTSE 100 Outlook and Analysis for 21st October 2019

Markets took a breather on Friday after weeks of Brexit-driven rumbling, as traders braced for the fallout from Saturday’s crunch Parliamentary vote.

Sterling spent most of the London trading session slightly up, knocking the FTSE 100 into the red by 0.44pc, while the mid-cap FTSE 250ended the day almost totally flat.

Currency trading desks will be bracing for a potentially major shift when money markets open in the Far East on Sunday evening – with tomorrow’s vote hanging in the balance, foreign exchange trading will be unpredictable.

Analysts said the pound, sat around $1.29, could jump to $1.35 if the deal passes, or slip back to its $1.22 doldrums if MPs force a delay.

After the vote
Boris Johnson will launch a renewed attempt to push his Brexit deal through Parliament as a rebel alliance of MPs pledged to fight a “guerilla war” to stop Britain leaving the EU by the end of the month. The Prime Minister will demand that MPs are allowed a straightforward vote on his deal after Oliver Letwin, a former Conservative Cabinet minister, conspired with Labour to destroy an historic weekend sitting of Parliament which had been expected finally to approve Brexit.

Amid growing fears that MPs will continue to thwart attempts to approve the deal, Downing Street is drawing up plans to force a general election which could take place as soon as Nov 28. John Bercow, the Speaker, may bar another vote on the deal on Monday.

On Sunday night, there were reports that the EU was considering offering Britain a “flexible” extension until February 2020 that would allow the country to leave whenever a deal is agreed.

Fiscal Prospects
The words “fiscal stimulus” were floating around the corridors of the International Monetary Foundation and World Bank headquarters over the past week, as finance ministers and central bankers from around the globe met at annual meetings in Washington. They discussed the synchronized slowdown across almost 90% of the world economy, but with little agreement on how best to approach it. Among the speakers, Tharman Shanmugaratnam, senior minister in Singapore’s government, warned of “profound uncertainty” and of denial over the scale of problems facing policy makers, while billionaire hedge-fund founder Ray Dalio said the economy is in a “great sag.” With central bankers low on ammunition, the IMF said there is little room for policy error. Here’s a rundown of what was discussed.

Markets Hesitant
Stocks headed for a cautious start to the week ahead of a slew of earnings reports, with U.S. equities continuing to flirt with all-time highs as earnings season heads into full swing. Elsewhere, the pound dropped after Boris Johnson failed to win parliamentary support for his Brexit deal. Equity futures were little changed in Japan and Hong Kong, while contracts edged lower in Australia. The S&P 500 Index ended Friday down 0.4% despite a batch of mainly positive earnings results. The dollar ended last week near the lowest level since July. Meanwhile, crude dipped 0.3% to $53.78 on Friday, and gold was at $1,490.05 an ounce.

Pound Plummets
Those who thought the weekend would finally bring closure to the Brexit palaver were sorely disappointed. The pound fell after Prime Minister Boris Johnson failed to win parliamentary backing for his divorce deal, ending a four-day winning streak. But strategists say the drop may prove short-lived. Analysts remain bullish even as a verdict on Johnson’s new divorce deal was deferred. Instead, lawmakers supported an amendment put forward by former Conservative minister Oliver Letwin which requires the House of Commons to pass all necessary Brexit legislation before holding a formal vote on the Withdrawal Agreement. That meant the prime minister was legally bound to ask the EU for another extension to negotiations. Here are the latest developments.



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

So yet another twist in the Brexit saga, with Boris defeated on Saturday and a “non” to further delays as well. However, in Berlin, Norbert Röttgen, the chairman of the German parliament’s foreign affairs committee, called for a long Brexit delay in order to provide time for a second referendum. So, it’s still chaos really. As such we will probably have a week much like last weeks, with most of the moves driven by cable. The FTSE 100 is looking fairly stable initially, and a drop down to the 7140 level looks likely. If that holds (and Fridays low was 7135) then we should see a rise towards the 200ema on the 30min chart at 7179, while the bulls will be keen to push past the 7200 level to target the 7214 fib level.

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

Above the 7220 area then we could well see a rise towards the 7240 and 7260 (daily resistance and also just above R3), especially if cable drops off. Though its actually held up pretty well so far, around the 12900 area. Just above the 7260 level we also have the 200ema at 7276 and I think that we may well see a stutter here or just above (the next daily resistance is at 7300, so a possible profit taking spot) should we get that high today. Will we have a Bull Monday?

If the bear were to break below the 7135 level then a drop down 7096 and the bottom of the 10 day Raff looks highly likely. Will this hold? Maybe, if cable and the news play the game, otherwise a drop down towards the recent low at 7007. If this were to break then things get pretty bearish, but I don’t think we will be testing that level today. The daily chart remains bearish and the bulls will need to break the 7215 level really (and make it stick) to get that bullish. The backdrop really isn’t on the bulls side at the moment though!

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