FTSE 100 Outlook and Analysis for 29th October 2019
Despite a lot of drag from HSBC, and some added pressure from a rising pound, the FTSE 100 closed up – marginally. It was a pretty weak day across European equities despite positive noises from the US on the trade-war front.
Incremental gains have been accumulating for Germany’s DAX, however, which is up a chunky 4.13pc so far this month – not bad, given the country is almost certainly in a recession (more on that in a couple of weeks).
In the US, with nowhere else to go, US stocks sleepwalked to new record highs, with Donald Trump’s claims of an imminent trade deal and hopes of further rate cuts from the Federal Reserve putting enough fire under the index to push it forward.
Stocks in Asia are set to advance after U.S. equities climbed to a record Tuesday, thanks to optimism for a trade deal, encouraging earnings and bets the Federal Reserve will cut interest rates. Treasuries slumped ahead of key central bank decisions. The S&P 500 took out its July record after President Donald Trump said the U.S. is ahead of schedule to sign part of the trade deal. The 10-year Treasury yield hit a six-week high, while Australian bond futures fell. The pound gained after the European Union agreed to a Brexit deadline extension, easing the risk of leaving the bloc without a deal on Oct. 31. Elsewhere, crude fell 1.6% and gold steadied after sliding 0.8%.
Now Boris Johnson is really stuck. The Prime Minister failed in his bid to trigger a snap election, which means he can’t even break the deadlock that’s preventing him from getting his Brexit deal ratified through Parliament. It’s a huge blow after he secured the deal with his European counterparts during talks in Brussels. Yet the signs are that he won’t have long to wait before firing the starting gun on the country’s third general election campaign in a tumultuous four years. On Tuesday he will try again to get Parliament to allow an early election to take place, this time using an easier legal route. Here’s how members of Parliament voted on the bid for a pre-Christmas election. On a side note, thousands of 50-pence coins minted to commemorate Brexit on Oct. 31 will be melted down, after Johnson accepted a Brexit extension from the European Union, two people familiar with the matter said.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The bulls couldn’t quite manage the 7360 resistance level yesterday, stalling at a daily high of 7348. The 2 hour coral trend line support at 7290 held though early on and that has now risen to 7320 for today. As such, the bears will be trying to break below this level. We also have the daily pivot at 7325 for initial support this morning so if these hold then we may well see a rise towards the 7360 resistance level. Will we get a bit of a bear Tuesday kicking in at this level? The US was certainly bullish yesterday with more upside to make new record highs, though overnight its been fairly flat, with the S&P hovering at the 3040 level.
The daily charts for the FTSE, S&P and Dax are all still bullish, with daily support at 7250, 2985 and 12555 respectively. Swing longs at these levels all look viable.
Above the 7360 level on the FTSE then a test of the 7400 is next up, and the top of the 10 day channel has risen to 7450 now, so the bulls will be aiming to take this higher. The bottom of the 10 day channel is at 7235 but is rising steadily at the moment, with both the 10 and 20 day trends bullish.
If the bears were to break below the 7320 level initially then the 200ema on the 30min chart at 7295, along with that 2 hour coral, and also S1 at 7303 may well see a bounce here. Below this then 7250 as mentioned is next up and a level that may well see some bulls come back in.
usually once you start seeing headlines about record highs, it only goes on for so long till we get the pull backs and with the fear/greed at 67/100 (greedy) it will probably appear soon.
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