Retail woes | 7395 7420 still resistance | 7330 support 7300 below that | Learning to trade analysis discussion

Bulls fight back as Middle East worries shaken off | 7570 7503 support | 7666 7686 resistance

13th June 2019

The pressure on the UK’s embattled high street retailers appears to have increased in recent months.

The British Retail Consortium warned that retail sales suffered their worst month in almost a quarter of a century in May. Total retail sales slumped 2.7pc, compared to May 2018, as footfall tumbled to a six-year low.

The FTSE 100’s seven-day winning streak ended as Donald Trump revealed he is “holding back” a deal to end his trade war with China. Trade tensions overpowered central bank stimulus hopes as weaker-than-expected inflation in the US fuelled expectations of a cut in interest rates to stem an economic slowdown. The FTSE 100 slipped back 30.83 points to 7,367.62, ending its joint-longest winning run of the year.

Markets in Hong Kong were rattled by growing anger to an extradition bill that would allow people to be sent to China for trial. Opponents fear the bill could prompt the US to strip Hong Kong of its “special status” and dent the financial hub’s reputation among investors. Leader Carrie Lam called for calm after demonstrations rocked the city and prompted police to fire tear gas and rubber bullets to disperse protesters, some of whom remained barricaded. She refused to withdraw the bill that triggered the conflict, which injured more than 70 people. President Trump expressed confidence that Hong Kong and Beijing will “be able to work it out.” The Hang Seng, its benchmark stock index, slid 1.7pc and interbank borrowing costs climbed to their highest level since 2008 as police clashed with protesters.

Stock Slump

Asian equity futures dropped after U.S. stocks slumped, with tech shares leading the declines. Trade pessimism blunted optimism the U.S. Fed is closer to cutting rates. Treasuries extended the global bond rally, with 10-year yields dropping two basis points. The dollar rose against every G-10 peer save the yen, with the Aussie giving up the most ground. Oil fell to a four-month low as U.S. crude stockpiles unexpectedly hit a 20-month high amid subdued demand. Meanwhile, oil demand is shriveling as the trade war between the U.S. and China trips up the global economy.

FTSE 100 Trading Signals, Forecast and Prediction

Since the drop off from the 7420 resistance we had on Tuesday it’s starting to look more bearish, and the 2 hour chart has resistance at 7415 yet to be tested, but the daily chart is bullish after that 6 day winning run, and has support at 7300. Ergo, thats the range I am looking at for the moment (7300 to 7415) and we may well see some bouncing around in that area.

There is also strong daily resistance at the 7443 level, so should we see that any time soon then a short here is worth a go.

FTSE 100 Trading Signals, Forecast and Prediction
FTSE 100 Trading Signals, Forecast and Prediction

If the bears break below 7330 today where we have S1 and the cam break out level, then I am expecting a drop down towards the 7300 level and that daily support. If it holds then I am looking at a rise towards that 7395 resistance level which may well then see some profit taking and more bears piling in.

The general mood is risk off still though for the moment, and we may have had the short term high at that 7420 level. As such, shorting the rallies towards that area are still favourable. The Conservative leadership race kicks off with the first round of voting today as well. Two horse race between Rory and Boris coming up?

News highlights today include German CPI, EZ Industrial Production, US Import, Export Prices & Jobless Claims, New Zealand Manufacturing PMI, SNB Rate Decision. Supply from Italy & US.

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