7th June 2019
The European Central Bank has pushed back plans to lift interest rates until at least the end of the first half of 2020 as fears mount over the impact of the trade war on the world economy.
ECB president Mario Draghi admitted that some policymakers at the central bank raised the possibility of interest rate cuts and restarting its money-printing programme. He warned that the risks to growth are titled to the downside despite the stronger-than-expected start to 2019 for the region’s economy.
“Geopolitical uncertainties, rising protectionism threats and vulnerabilities in emerging markets are leaving their mark on economic sentiment,” he said.
However, European markets appeared underwhelmed by the ECB, giving up strong early gains. Silvia Dall’Angelo, economist at Hermes Investment Management, explained that “the ECB has resisted markets’ expectations of aggressive easing and delivered an underwhelming package of measures.”
The main U.K. opposition Labour Party successfully defended its Peterborough seat, denting the momentum of Nigel Farage’s Brexit Party — the bookmakers’ favorite to take the constituency in Thursday’s by-election. Lisa Forbes took 30.9% of the vote in the eastern English city, beating out candidates for the Brexit Party on 28.9% and for Prime Minister Theresa May’s ruling Conservatives on 21.4%.
FTSE 100 Trading Signals, Forecast and Prediction
That was a decent day yesterday with a good reaction for the FTSE at the 7275 level for a drop down. Today is Non Farm Payrolls, and also we have the UK inflation outlook for the next 12 months. NFP is at 13:30, forecast is 175k. UK Inflation report is at 09:30.
Asian equity markets were mostly higher following the tailwinds from US where sentiment was underpinned by hopes of averting tariffs on Mexico. However, White House Press Secretary Sanders later cast doubts on this and stated the US is still moving ahead with tariffs.
Initial resistance today is showing at 7286 and actually appears to be quite strong looking at the chart, so I think we may well see an initial dip from around this area. We are at 7275 as I write this as well. From there I am thinking that we may well see a drop down to 7230 where we have the 200ema on the 30min chart, and just below the 2 hour support which is at 7248. I think we might well see this area had as support, and then a bit of a rise as we head towards NFP. However, should it break then the next level to watch is the 2 hour coral line at 7209, and then daily support at 7197 below that.
Should the bulls push past the 7285 level then 7313 is next up, with just below the 7400 level below that, though I don’t think we will see that high today, unless NFP does something spectacular to the markets! The S&P is at the top of some key resistance as well (in fact just above) as its sits at 2845.
7232 was also yesterdays in hours low and where we dropped down too from the 7275 level, so we may well see some double bottom action here, for a bit of a bounce back up. The ASX200 had a bit of a bullish Friday with a slow rise up.
The market has certainly recovered well since the drop down to 7079, suggesting that “might” have been a fake breakout below the 7100 support level. If the bulls can get a daily close above the 25ema on the daily at 7269 we may be on for some more bullishness next week.
So, be slightly cautious today with NFP out later, and have a great weekend
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