Iran attacks US base in Iraq | Futures drop and recover | 7575 resistance | 7499 support

Iran attacks US base in Iraq | Futures drop and recover | 7575 resistance | 7499 support

FTSE 100 live outlook prediction analysis for 8th January 2020

London’s benchmark index ended the day broadly flat with the FTSE 250 eking out narrow gains overall.  Retailers and landlords such as Intu and Hammerson rose during the session but the standout was Premier Oil, which surged 16.3p to 117.75p after agreeing to buy North Sea assets from BP.

Iran has launched over a dozen ballistic missiles at two Iraqi air bases, no US casualties have officially been reported thus far. US President Trump tweeted “all is well…Assessment of casualties & damages taking place now. So far, so good!” – a statement will be made later today. Asian equity markets traded lower across the board, albeit off lows as Trump sounded cautiously optimistic.

IRAN THREATENS DUBAI & ISRAEL: The Islamic Revolutionary Guard Corps said in its Telegram channel that, in the event Iranian soil is bombed, it will target the cities of Dubai, United Arab Emirates, and Haifa, Israel, in the third wave of operations.

The U.S. issued a warning to shipping in the Middle East over the possibility of Iranian action against U.S. maritime interests, the Associated Press reported, citing a statement. In Brussels, the foreign ministers of France, Germany and the U.K. are holding an emergency meeting to discuss their options to try and defuse tensions.

Market Open

Asian equity futures were mixed after U.S. stocks fell amid the Iran tensions. The dollar rose across the board, with the Australian dollar losing more than 1% as investors assess the impact on the economy from the ravaging bushfires. Oil continued its retreat from multi-month highs. Gold advanced.

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

Tricky one to pin your colours to the mast for today, but I am looking at the 2 hour resistance level as initial resistance at the 7575 level, and also the R1 and fib level above that at 7595. As such I have gone for a short in this area, for another run down towards the daily support at 7499, where we have the 25ema. Below this then a retest of the S1 and overnight low at 7475 looks likely. If the bulls were to push past the 7600 level then we should see a rise towards the R2 level at 7663. The market will be watching the news flow quite carefully and if this escalates much further. So far the rebound suggests that the market is not pricing in a massive escalation in tensions.

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

With that overnight drop the 2 hour has gone bearish, and as mentioned has 7575 as resistance from both the moving average and the coral line. We dropped down to the daily support level from the 25ema at 7499 overnight which I mentioned yesterday (exceeded it slightly though on the news) and have seen a decent rebound back towards 7540. If that level continues to hold and the tension recedes then we should reuse the bullishness for a bit longer and am still looking at a rise towards the 7700+ area. Possibly even 7850! Markets love wars!

Gold continues to rise on the fear, and is back testing $1600, and we may well see further upside on that. It is however now testing the top of the Raff channels, but a drop back to the 2 hour support at 1581 looks viable for a bounce.

Not too much more to say on the FTSE really, looking at 7575 and 7600 as resistance with 7663 above that. 7499, 7475 as support though a break of that would likely see a drop down towards 7400 where we may well see a bounce.

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