FTSE 100 outlook and live trading | 7222 7280 resistance | 7140 7120 support | FTSE live analysis

FTSE 100 outlook and live trading | 7222 7280 resistance | 7140 7120 support | FTSE live analysis

FTSE 100 Outlook and Analysis for 16th October 2019

London’s mid-cap stock index surged to its highest level in more than a year and the pound jumped again as investors piled into domestically-focused stocks on hopes of a Brexit breakthrough. The FTSE 250 closed up 1.34pc at 20,196.97 points as traders bought shares in retailers, landlords, high-street lenders and restaurants amid a relief rally that spilled onto international markets.

Sterling hit a five-month high against the euro and four-month high against the dollar on Tuesday, following reports that EU and UK negotiators were on the verge of a Brexit breakthrough. Sterling touched as high as $1.28.

Analysts see the FTSE 250 as a better measure for how the UK economy is judged to be performing than its big brother the FTSE 100, which is heavily reliant on firms such as BP and HSBC which earn huge amounts of profit abroad. The FTSE 250, less internationally-focused than the blue-chip FTSE 100, has been seen as a bellwether for negotiations, with many of its constituents exposed to the potentially fallout from the UK’s withdrawal from the EU.

Tariff Tensions

Beijing is laying down more rules of play in its trade war with the U.S. Chinese officials want a rollback in tariffs before they can feasibly agree to buy as much as $50 billion of American agriculture products, people familiar with the matter said — exports that were part of the initial deal, according to President Donald Trump. Although China is willing to start purchasing more U.S. agricultural products as part of the “phase one” trade deal, it is not likely to reach $40 billion to $50 billion under current circumstances, the people said, asking not to be identified. Washington had said China, which imported about $20 billion of U.S. farm goods in 2017, agreed to make large agricultural purchases in exchange for relief on upcoming tariffs. Beijing’s position makes a deal more complex than initially described.

Markets Optimism

Asia stocks looked set to gain Wednesday after their U.S. peers touched four-week highs as earning season got underway. The pound strengthened amid much-needed good news in the Brexit saga. Futures were higher in Tokyo, Sydney and Hong Kong, while the S&P 500 Index topped 3,000 on an intraday basis for the first time in three weeks. Treasuries retreated, with 10-year yields close to four-week highs, amid the risk-on backdrop. Crude oil fell for a second day and gold dropped. Elsewhere, the Turkish lira jumped and the country’s benchmark stock index rose after Trump imposed milder penalties over its military campaign in Syria than U.S. lawmakers had demanded.

Closing In on a Deal?

The latest developments in the on-again, off-again Brexit saga are looking more promising — for now. U.K. and European Union negotiators are closing in on a draft deal amid optimism there could be a breakthrough before the end of Tuesday, two EU officials said. They cautioned talks haven’t yet finished, and there could be problems hitting the midnight deadline. But there are clear signs that a legal text is close to being ready. The aim would be to present the draft to national delegations on Wednesday morning, an EU diplomat said. Still, Prime Minister Boris Johnson will need to secure the agreement of the U.K. Parliament. Negotiators have approached, and even managed to strike, a Brexit deal before — only to see it shot down in London. Nevertheless, the pound surged to the highest level in nearly four months.



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

And the Brexit negotiations rumble on, with the EU now saying that even if a deal is reached we cant leave will January 2020. We shall see! However, it does look like a deal is getting closer which is something. The optimism has helped cable further, which has now passed the 12700 level. For today, the FTSE still has resistance at the 7240 level that we shorted from yesterday, and has found support at 7175 in the short term. That said the bulls have failed to get it back above 7200 so far, and with the daily pivot at 7207 we may well see an initial dip down further, towards the daily support level at 7140. With S2 also at this level we may well see a bounce here, especially if cable were to drop back a bit. Again, keep watching the Brexit news flow and also cable.

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

The S&P managed to rise to the top of its 20day channel at 3005 yesterday and has dropped back since. There still looks the possibility of a drop down to 2970 on that, possibly lower, but the daily chart is also slowly turning bullish, and shows 2955 as a possible support level, should 2970 break.

If the FTSE bulls were to break above the 7207 level today, then 7240 and 7251 (where we have a key fib) are the next key areas to watch. Above this then the 7280 200ema still looks ripe for a short entry, should we get that high today. Above this then the top of the 20 day Raff channel is at 7368.

Below the 7140 support level then S3 at 7100 and a possible test of the 10 day Raff channel bottom at 7010 is on the cards. That would also be a retest of the recent low.

So for today, another mixed bag expected, but watching the 7140 support level. 7207, 7224, 7250 and 7280 level all look viable resistance as well. Stay nimble!

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