FTSE 100 live outlook prediction analysis for 10th August 2020
It was quiet end to the week on the equities front, with European and US share trading pretty flat, despite that brief jump on the US employment data.
Friday recap:
- The US added 1.8m payrolls in July, continuing a trend towards recovery but leaving pre-virus level a long way off. Experts have warned the recovery may become more difficult from here.
- Industrial production in Germany and France jumped, as the countries continued to head toward a ‘v-shaped’ recovery in factory output.
- British Airways began telling thousands of staff whether they will lose their jobs as the airline presses on with painful restructuring of operations in response to coronavirus
- The Evening Standard announced plans to sack about a third of its staff, including half its journalists.
- Halifax said house prices hit a new record high last month after a July ‘mini-boom’.
Five Million
The U.S. passed 5 million Covid-19 infections after adding 1 million new cases in barely more than two weeks. Cases and deaths slowed in Florida and Arizona, while the positive-test rate in Texas hit a fresh record. U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi signaled readiness to resume negotiations on pandemic relief without setting a date. Italy reaffirmed plans to open schools in September, a message that was echoed by the U.K. government, even as new cases there rose to more than 1,000. Paris will mandate outdoor face coverings on its busiest streets starting Monday. Microsoft founder and billionaire philanthropist Bill Gates said it’s “mind-blowing” that the U.S. government hasn’t improved its Covid-19 testing.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The dollar was steady at the start of the trading week and stocks traded mixed as investors weighed uncertainty over the timing of a stimulus package from Washington and looked ahead to this week’s expected review of the U.S.-China trade pact. Oil climbed.
Shares in Hong Kong retreated, with Tencent Holdings Ltd. seeing more losses following Friday’s plunge. S&P 500 futures fluctuated, while equities in South Korea and Australia climbed. Japan and Singapore are shut for holidays and Treasuries won’t trade until the London open. Crude advanced as Saudi Arabia’s state-controlled producer said it expects energy demand to pick up. Gold slipped.
Investors are grappling with an unclear timeline, with neither Democrats nor Republicans giving a firm date after reaching an impasse last week. The two sides are trillions of dollars apart on overall spending and on key issues, including on aid to state and local governments and the amount of supplementary unemployment benefits.
A strong start across the board and in Asia to the week so I am fully expecting a bit of a bull Monday once again as the S&P will want to target the 3399 resistance level. Just below that we have 3387 as well with R3 here. The FTSE futures have also been quick out the blocks and a rise towards the 6120 25ema on the daily looks likely today. That said, we have initial resistance at the 6076 level, and some weaker daily resistance at 6083, so we may well get an opening drop that we can get long on.
If the bulls were to break 6120 then 6227 is the next area of note for me, where I have the daily coral line (now red) and also the top of the 10 day Raff channel. The 20 day channel is just above this at 6272 – not sure we add nearly 200 points today though but bear it in mind.
Initial support today is at the 6040 to 6050 area where we have a cluster of supports, including the 200ema not eh 30min and the daily pivot, along with the 30min coral (green). As such, if we get an opening dip down to this area then a long here looks to be worth a go and we can follow Australasia’s lead with a rise today. If the bears were to break below the 6040 support then 6012 is S1 and then 5994 for the key fib below that. If they break 5980 – which is the daily support then it would get quite bearish but against a strong Monday so far in Asia I would be surprised if we seriously drop today. I can see an opening drop off the 6080 level though, probably pre market as we are sitting on that as I write this.
So, looking bullish for today and watching the 6120 and 6160 resistance levels. For support 6040 and 6000. Good luck today.
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