FTSE 100 live outlook prediction analysis for 10th September 2020
The FTSE 100 ended a wobbly session slightly down, with London’s mining sector tossed about by a choppy performance for the pound. After initially showing signs it would snap its longest losing streak since March, sterling plunged once again amid escalating tensions between the UK and EU.
- Pound tumbles as tensions grow between EU and UK
- ECB holds rates steady and leaves bond-buying plans untouched
- Lagarde declines to ‘talk down’ strong euro
- Eurozone expected to shrink 8pc this year versus previous estimate of 8.7pc
- US weekly jobless claims steady at 885,000
Millions of Americans are heading for long-term unemployment, or unemployment lasting 27 weeks or more. Most states offer 26 weeks of jobless benefits, but many of the workers who have been without a job since late March will hit that mark this month. A separate Labour Department report showed prices paid to US producers rose in August by more than forecast, indicating a rebound in demand from the pandemic-related lockdowns is gradually restoring pricing power.
Brexit Nosedive
Talks between the U.K. and the European Union are fraying, leaving the two sides headed for a chaotic split without a new trade deal. During crisis meetings Thursday, Prime Minister Boris Johnson’s government rebuffed an EU request to scrap his plan to re-write the Brexit divorce accord even after the bloc gave him a three-week ultimatum to do so and threatened legal action. The dispute risks jeopardizing already faltering efforts to secure a trade deal between the two sides by Dec. 31. The pound fell. “The U.K. has not engaged in a reciprocal way on fundamental EU principles and interests,” EU chief Brexit negotiator Michel Barnier said in a statement. “Significant differences remain in areas of essential interest for the EU.” Barnier’s view was backed up by his U.K. counterpart, David Frost, who said in a statement that “a number of challenging areas remain and the divergences on some are still significant.”[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Stocks headed for a second week of losses as a fresh selloff in U.S. megacap technology shares highlighted the lingering concern over valuations in certain pockets of the market. The dollar edged down.
Japanese shares reversed early losses Friday to trade modestly higher with those in Hong Kong, while equities elsewhere in Asia slipped. S&P 500 futures nudged up following a topsy-turvy U.S. session which saw the Nasdaq 100 lose more than 2% amid lingering worries that its five-month rally stretched valuations too far.
Meantime, crude was steady near $37 a barrel in New York. The euro extended its climb against the dollar, while Treasuries were little changed. Gold edged lower. Indonesia shares clawed back some of this week’s tumble spurred by harsher lockdown measures in Jakarta.
Overnight the bulls have fought back from the lows and we have initial support at the daily pivot at 5987 to start with. If this holds then I am expecting a rise today to test the top of the 20 day Raff channel at 6035. This is also just above the key fib level and also R1, so should get a reaction here. If the bulls break above 6035 though then we are likely back on the path towards the 6100 level. However there is R2 in the way at 6069, and we may well coincide with a Friday pump higher on the US markets at that level. We would also be on for another test of the daily coral (still red, trend indicator) at 6112, along with the 10 day Raff at 6086. So a few key resistance levels to watch for today.
For the bears, if they break below the daily pivot this morning then 5959 is the 30min 200ema and the line that we have climbed from overnight. Below this then the 5944 S1 level, along with the key fib at 5941 is fairly key and I have put the long order in at this area. 5951 is also the coral line on the 2 hour chart, and held as support on Tuesday at the 5860 level. As such, the trend on that timeframe remains bullish.
If the bears were to break below 5940 today then we will more than likely see a drop down to the 5900 level and a pretty bearish Friday. With S2 at 5906 this is a very real possibility, especially as we are testing the top of the Raff channels at the moment and there is probably a strong case for a slide. Virus cases continue to rise, companies are probably going to start going cap in hand to the government again, and of course the furlough scheme is due to end at the end of October. Might have another trillion added to the debt before too long!
Anyway, have a good day trading today and a good weekend too. Watch for that pivot initial suport at 5987, with 5940 below that. 6035, 6070, 6100 as resistance.
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
Keep up to date with new content, free sign up below
[yikes-mailchimp form=”4″]