30th July 2019
Wow – wasn’t expecting it to actually hit the 7708 resistance level yesterday. We trended up all day on the FTSE 100 as the pound fell to new 2 year lows, breaking below the 12300 level on the no-deal Brexit fears. Sterling fell to lows of $1.2213 and €1.0971 after Boris Johnson appeared to split with Michael Gove on the likelihood of Britain leaving the EU without a deal, having begun its slide in the morning.
The pound’s weakness threw fuel on the fire under the FTSE 100, which was already being dragged upwards by merger activity around Just Eat and London Stock Exchange Group. The blue-chip index closed the day 1.82pc up at 7,868.61, while other European indices sagged. The FTSE 100 closed 1.82pc higher, following a bullish day of trading spurred by the pound’s slump and merger activity. Just Eat and London Stock Exchange Group led risers, with strong performances from Vodafone, AstraZeneca and Centrica also lifting the blue-chip bourse.
The UK is set to leave the European Union on October 31, a date which Mr Johnson has labelled a “do or die” target after a similar deadline in March was postponed. Monday’s slide raises the spectre of sustained pressure on the pound during the coming three months.
Asian Stocks Hold Steady
Asian equity futures showed surprising backbone after U.S. stocks edged lower as Amazon, Facebook, Alphabet and Netflix all fell. The 10-year Treasury yield dipped for a second day to 2.07% before the Fed’s anticipated rate cut Wednesday. The dollar climbed, while the pound slid to its lowest level in more than two years. Oil and gold were both higher.
FTSE 100 Trading Signals, Forecast and Prediction
It’s quite a rare thing to see the FTSE gain 150 points in a single session but thanks to cable’s decline it managed it yesterday. Cable may well be in the driving seat again today and as such if we see a bit of a bounce on that from its two-year lows we may see a bit of a pull back on the FTSE 100 today. Other markets weren’t as bullish yesterday, with the S&P remaining below the 3030 level (though 3126 is still showing as weekly resistance).
We got a bit of a bearish reaction at the longer term 7708 resistance level yesterday but the futures prices have moved above that pre open. If cable were to bounce then the FTSE 100 may well drop back a little bit and I am looking at the daily pivot at 7652 as the main support level today. Above this we have the 30min coral at 7704 and also the 25ema on the 30min chart at 7700 for initial support. So we could see this hold if cable doesn’t bounce too hard. To be honest, there is probably going to be further downside on cable, and also its going to have a volatile 3 months or so as we head towards the Brexit deadline date on 31st October.
If the bulls were to break above the 7756 level today then 7775 is the cam break out level and I wouldn’t be surprised if we start nudging towards 7816 where we have R2 if they break 7775. However, the ASX200 had an initial rise then dropped back today, and if cable doesn’t mess up the plan I think that we may well do something similar and a drop back to the pivot would pan out quite well. The bulls of course will be keen to build and consolidate on yesterdays move and as such are likely to want to defend the 7700 level, and certainly the 7650 area.
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates