Record highs Wednesday for USA | 7470 7503 7518 resistance | 7435 7408 support | Gold breaks $1600

FTSE 100 live outlook prediction analysis for 20th February 2020

European and US stock indices pushed back to record highs on Wednesday, as investors continue to pile into equities, shrugging off fears about the coronavirus’s potential impact on growth.

UK consumer price inflation rose to 1.8pc, marking the first increase in six months. Rising bills, pricier petrol and more expensive clothes have pushed inflation up to a six-month high – reducing pressure on the Bank of England to cut interest rates. The cost of living in January was 1.8pc higher than in 2019 as measured by the consumer prices index. That is a sharp increase from the 1.3pc annual rise in prices recorded in December and is the highest figure since July, according to the Office for National Statistics.

European shares across the continent finishing as fresh record highs as investors continued to buy into the equity dream. The FTSE 100 outperformed slightly, as a softer pound gave Britain’s blue-chips some support, closing at 7457, up just over 1%.

Markets Mixed
Stocks came under pressure in Asia and U.S. and European equity futures retreated after Japan reported two deaths from the coronavirus and cases in South Korea jumped, spurring concerns about the spread of the disease outside China. U.S. and European equities closed at record highs. The yen slid to its weakest in nine months amid concern the Japanese economy is heading toward recession and as Chinese stimulus reduced demand for some haven assets. Equity futures in Japan rose almost 1%. The dollar climbed to the strongest since October after data on housing starts and building permits exceeded estimates. Treasuries held steady after minutes showed Federal Reserve officials viewed monetary policy as appropriate “for a time.” Elsewhere, oil gained as U.S. sanctions on Russia’s largest producer and conflict in Libya put the focus on supply threats.

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

We had the 7470 level pencilled in for resistance yesterday and unfortunately its hit overnight but did get a reaction with a drop to 7430. The bulls have fought back overnight though and a break of 7470 will likely see the next key resistance area at the 7500 level. With the algo’s defending the 200ema level at the 7435 then I am thinking that we see more bullishness today to at least see a retest of 7470.

The S&P managed to get the 3395/3400 resistance level overnight too and also saw a reaction as the sell bots kicked in there. Again, this has seen the “buy the dip” overnight and has recaptured the 3385 level this morning.

With the FTSE rise from 7350, the 2 hour chart is now bullish with 7405 showing decent support from both the moving average and the coral at this level, As such, should we drop this low then a bounce here may well transpire. Having tested these resistance levels we have been looking for this week (3395 and 7470) its possible that we get a bit of a leg down, and with gold breaking above 1600 and holding steady that may well play out. So cautiously bullish for today looking at 7470 retest and also the 7503 levels. Should the bears break below 7400 then we are likely to see a drop down to 7300 materialise. That said we have S1 at 7420 initially and they will be keen to defend this – previous resistance becoming support as well.

So, the ball is in the bulls court today really, and the S&P will be keen to break the 3400 level. We also have the top of the 10 day Raff channel at 7518 so if the bulls were to go for it today we may see it try for this area, but that 7503 resistance level will likely hold. Famous last words!

I am thinking that shorting a rally today would be a decent play, especially if we were to retest the 7470 level, so a small go there again if seen is probably worth a go. Likewise with 3395 on the S&P. Good luck today.

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