Possible consolidation day today with 6720 support | 6820 resistance | Brexit vote delayed | Trading analysis

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

11th December 2018

Stock markets in Europe closed in the red after what was a day of economic and political uncertainty. The FTSE 100 closed 56.57 points, or 0.83pc, lower at 6,721.54 while the FTSE 250 fell 351.80 points, or 1.97pc, to 17,492.31. A similar scene played out across Europe as the Paris CAC 40 ended 70.75 points, or 1.47pc, lower and the Frankfurt DAX 30 dipped 166.02 points, or 1.54pc to 10,622.07.

The pound fell below $1.26, to its lowest level since April 2017 after Theresa May confirmed in a statement to the House of Commons that she was delaying a vote on her Brexit deal, which was scheduled for Tuesday. Sterling was 1.44pc down against the dollar at $1.2551 at the close of trade and 1.11pc lower against the euro at €1.1056.

The Prime Minister called an emergency conference with cabinet ministers yesterday morning after the European Court of Justice ruled that the UK can unilaterally revoke Brexit without the permission of other European Union countries.

Faced with a humiliating defeat of her Brexit deal, Theresa May announced to the House of Commons she would defer a vote and return to Brussels to seek “assurances” from European Union leaders. Her words signal that she doesn’t expect much of substance will be changed. Nor would she be drawn on when the government will put her unpopular deal to a vote. That raises the prospect that May will be back in Parliament in January with virtually the same deal, relying on tanking markets and frightening no-deal preparations to convince lawmakers to back her.



FTSE 100 Trading Signals, Forecast and Prediction

For today I am thinking that we will see a retest of the 6820 area which is just above yesterdays high, and also has three pretty decent resistance levels. We have R1, a key fib and also the 200ema on the 30min here, so I feel that it is worth a short at this level again. It would also be the first time we have retraced back towards the 200ema since crossing below it on the 4th December.

The ASX200 had a fairly bullish session so far on Tuesday and we may well do the same, so bear Tuesday might be a slightly stronger affair. The support initially is at 6764 where we have the daily pivot, and also the coral at 6759 just below that. The bears will be aiming for an early break of that level as that opens up a trip down to the fib at 6723 which may well hold. Again, it is near the bottom of yesterdays range as well.

The bulls recovered well from the low yesterday with the evening seeing a rise from he 6720 level. Tentative signs of a bit of a bounce starting possibly, helped by the vote being delayed till the New Year (handy for the bulls!).

Above the 6820 resistance level then 6884 makes a lot of sense and looks distinctly possible as a target for the upside, and also a resistance level. We also start getting near the top of the 10 day Raff channel at this level at 6906. A break above this would suggest that 6670 is going to be the recent low and the bull charge is underway.

On the other side of the coin, should the bears break below 6670 then 6500 is still possible.

Choppy price action again I think, with a possible bullish slant today. (sound like a weather forecaster!). Feels and looks a bit more positive for today anyway, as both the Dax and S&P 2 hour charts have gone bullish, with support at 10630 and 2616 respectively.

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