FTSE 100 live outlook prediction analysis for 7th August 2020
The FTSE 100 underperformed against its continental peers due to the pound’s strength on the back of a less pessimistic outlook by the Bank of England. The London benchmark index fell 1.27pc to 6,026.94, with internationally exposed companies such as GlaxoSmithKline and Unilever ending the session lower. In the eurozone, the Frankfurt Dax and Paris CAC fell 0.5pc and 0.98pc respectively.
- Initial jobless claims fall to 1.2m, bucking upwards trend
- Continuing claims drop to 16.1m
- Bank of England MPC holds interest rates, leaves QE targets unchanged
- Unemployment expected to hit 7.5pc by end of year
- Economy won’t recover until end of 2021
- Pound rises as fears of negative rates fade
Digging Deeper
A U.S. panel recommended tightening the disclosure requirements for Chinese companies listed on American exchanges, following mounting concerns about the potential exposure of investors to fraud. The group, known as the President’s Working Group on Financial Markets, has not established exactly how the new rules will be enforced, but the final consequence would be delisting, according to a senior Treasury official. One of the big issues includes an almost two-decade-old dispute over China’s refusal to allow the inspectors from the Public Company Accounting Oversight Board to review audits. Currently listed Chinese companies would have until Jan. 1, 2022, to come into compliance, while firms seeking a new listing will need to adhere to the new rules, officials told reporters Thursday.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Stocks dropped Friday, led by Chinese technology firms, after a U.S. move to prohibit transactions related to WeChat stoked tensions. Treasuries and the dollar rose. China and Hong Kong shares saw the bulk of losses, with WeChat operator Tencent Holdings Ltd. slumping more than 10% at one point. The offshore yuan also retreated along with American and European equity futures. President Donald Trump signed executive orders prohibiting U.S. residents from doing any business with WeChat, TikTok or the apps’ Chinese owners beginning 45 days from now, citing national security risks.
The main event today will be the NFP jobs data at 13:30 with the forecast to be 1580K versus 4800K previously. As such we may well see a bit of buy the rumour sell the news play out today. I am looking at initial support at the 5980 level this morning where we have the key fib and also S1. If this holds then we may well get a rise towards the daily pivot at 6040 and if the bulls do really go for it, the daily resistance level around the 6080 area where again we have a key fib level.
Overnight we have dropped off the 6060 level once again, and the SPX stopped just shy of the 3358 resistance level, dropping from 3055. On the S&P the 2 hour chart is now bullish with this 3340 level as support, and then 3322 below that. The bulls will certainly be keen to keep the momentum going. Above 3358 the next level of note is 3399.
If the FTSE were to break below 5980 then 5923 S2 is the next support level and once again the bears will start to think about targeting the bottom of the Raff channels around the 5750/5800 area if they break S2. The bulls will however want to keep the price above 6000!
Above the 6080 resistance level then we still have the as yet untested 25ema on the daily chart at 6118 for today. Should we see this today we may well see some bears appear here. If it gets broken then above this the 6204 level is the top of the 10 day Raff, with a now red daily coral line above that at 6228.
It’s NFP Friday so pays to be a little bit more cautious today. Gold continues climbing apace though with 2293 next up now its broken 2255. Good luck today and have a great weekend!
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