5th July 2019
After a day of moving very little, London has closed almost totally flat, probably because as traders are awaiting post-holiday news from the United States. Moves on the FTSE 100 index were small, leading the blue-chip index to close 0.08pc lower at 7,603.58. The FTSE 250 saw some bigger individual movements, but more or less neutralised itself to end 0.03pc higher at 19,767.61.
The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 160,000 in June, rebounding from 75,000 the month prior.
American markets, which hit new record highs this month as the US economy notched up its longest unbroken run of expansion, were left on ice yesterday as traders took a break to celebrate Independence Day. New York’s major indices have been on the rise for over a decade now, beating the previous bull run before the dotcom bubble burst. The Dow Jones Industrial Average ended 170 points higher on Wednesday to follow the S&P and NASDAQ to new highs.
Supertanker Seized
The U.K. and Iran are embroiled in a diplomatic dispute after British Royal Marines and Gibraltarian police seized a supertanker carrying Iranian oil to Syria in violation of sanctions. Iran said the action off Gibraltar was illegal and summoned the British ambassador to the Foreign Ministry in Tehran. It comes as the U.K., France and Germany try to stop Iran walking away from the nuclear deal.
Stocks Muted
Asian stocks were mixed with no direction from their U.S. counterparts thanks to the American holiday. Samsung’s operating profit fell 56% Y/Y. The dollar was flat as investors await the key U.S. jobs report Friday. Futures in Japan, Australia and Hong Kong were little changed, as were U.S. contracts. European shares drifted Thursday in a lackluster session marked by thin trading volumes. Treasuries weren’t trading thanks to Independence Day. Gold slipped but stayed above $1,400, while oil futures fell, even amid further Middle East tensions.
FTSE 100 Trading Signals, Forecast and Prediction
Should get a bit more movement today compared to yesterday and of course we have NFP today, forecast to be 160k. As such we may see a buy the rumour, sell the news day play out with a steady rise to the 7640/50 area where we have a cluster of resistance. If the bulls were to break above the 7654 fib level then I am thinking that we will see 7678 and possibly the top of the 10 day Raff channel at 7690. If NFP exceeds the forecast by a large amount we may see a pull back though, as that will then mean that rate cuts (the potential for cuts, and stimulus, has driven the recent climb in markets) are more unlikely. With R3 and the 2 hour moving average at 7641 though I am thinking that we may see the bears appear at this level.
On the bearish side, we have initial support at 7594 with the 2 hour coral here, and S1 at 7592. Should the bears break below this level then S2 at 7583 and possibly a drop down to 7555 where we have the fib and 200ema on the 30min. That area may well hold though, so probably worth a long at that level if seen.
Obviously with the small movement today the FTSE 100 is a bit coiled up, hence the levels all being fairly close. I am expect a rise and dip to play out today though, but don’t forget NFP at 1330.
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