FTSE 100 live outlook prediction analysis for 18th September 2020
These were some of the day’s top stories:
- Sterling on a rollercoaster: The pound found itself tossed about today, ending the London session basically flat, after being knocked by the Bank of England’s hint at negative rates and then boosted by Ursula von der Leyen’s optimism on a potential UK/EU trade deal.
- Bank of England moves a step closer to negative rates: The Bank of England took another step towards controversial negative rates on Thursday amid rising Covid infections and a looming unemployment crisis.
- Ryanair suffers investor rebellion over executive pay: Ryanair has suffered a shareholder rebellion, with more than a third of investor votes against executive pay at the budget airline’s annual meeting.
- John Lewis to axe staff bonus after slumping to loss: John Lewis Partnership is to axe its famous staff bonus for the first time in more than 60 years after slumping to a loss for the first half of the year.
- ‘Optimistic’ Next reports recovery in sales: Next managed to turn a small profit in the first half and raised its outlook for the rest of the year after trading beat expectations post-lockdown.
Markets Lift
Stocks in Asia were mixed on Friday though remained on course to climb for the first week in September as investors look for the next catalyst to reignite the rally. The dollar steadied after Thursday’s gyrations.
Declines at Tencent Holdings Ltd. weighed on Hong Kong’s stock market after a report the Trump administration has asked gaming companies to hand over information about their data-security protocols involving the Chinese tech giant. Shares in Shanghai and Tokyo edged up, while those in Seoul traded flat. South Korea’s won outperformed among emerging-market currencies, trading at an eight-month high. Treasuries were little changed.
S&P 500 futures slipped after the U.S. index dropped for a second day, though it did find some support after bouncing off its 50-day moving average. Technology shares were the biggest decliners, with Apple Inc., Facebook Inc. and Microsoft Corp. weighing on the Nasdaq Composite. Data showed the number of Americans applying for jobless benefits resumed a decline.
Investors are on the lookout for more U.S. fiscal stimulus after the Federal Reserve indicated this week that interest rates will stay low for years to come. With global Covid-19 cases exceeding 30 million, data continues to show a patchy recovery path around the world.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
For today, we have quadruple witching so expect some chop at 10:10 for about 10/15 minutes as the various contracts roll over. Bear that in mind. Initially we have held above the 6000 level despite the bears trying o break below it yesterday (stop hunting?) and we have initial support from the 30min coral at 6036. However, with the FTSE holding up the daily chart is locking in some bullishness now from the moving averages and has support at 6022. As such I still think that dips down to this area are worth longs for a possible run up next week. The S&P looks like it should rise to test its 2 hour resistance at the 3385 area today.Can the FTSE push back up to 6400 soon?
Below the 6020 level then the bears will be looking at the 5980 level, with S2 at 5955 below that. If we were to get that low today then I am thinking that a swing long is worth a go here.
If the bulls can manage to get past 6085, and we have the 2 hour coral at this level which is now red, along with another test of the Hull moving average (the one we dropped off from Wednesday at 6098) they might snuggle a bit here. If successful though I am expecting a rise towards the 6120 level initially, and then possibly the 20 day Raff early next week which sits at 6216 for the moment.
So, still feels like buy the dip, for the FTSE at least is the right play and hopefully these overshoots of the key levels will stop soon! Daily chart certainly suggests some upside coming, and that 6020 initially looks key support. But the 2hr resistance is also close so needs to be broken (6085). Good luck today and have a great weekend.
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