FTSE 100 live outlook prediction analysis for 20th August 2020
Here are some of yesterday’s highlights:
- Apple becomes first US company to hit $2 trillion value: Apple has become the first US company to become worth $2 trillion, a landmark moment in a stock market boom that has made tech companies more valuable than ever in the midst of the coronavirus pandemic.
- Inflation rises to 1pc as pent-up demand pushes up prices: The end of lockdown combined with the heatwave sent the cost of haircuts, camping kit and ice creams soaring in July, even as hotels, flights and cinema tickets were on offer at discount prices.
- Pound erases 2020 losses as dollar keeps sliding: The pound erased its losses against the dollar for the year on Wednesday as the US currency continues to weaken.
- Shipping giant Maersk sees end in sight to coronavirus storm: Global shipping giant Maersk has raised its profit forecast as it shrugs off the impact of the pandemic, but warned of problems in getting stranded sailors home.
- Amazon to sell full range of Morrisons products: Shoppers will be able to do their full Morrisons grocery shop on Amazon just weeks after the tech giant said it would offer free delivery to millions of customers if they buy food on its website.
The pound has bounced back to pre-pandemic levels against the dollar as investors bet that the worst of the Covid crisis has passed in Europe. Sterling rose as high as $1.3267 on a fifth day of gains, lifting it above its January level for the first time, before falling back later in the day. The rally has been driven by a fall in the dollar as investors move their cash out of safe haven US assets and into more risky punts. It caps off a remarkable turnaround after the pound hit a 35-year low of $1.1450 in March.
On Again, Off Again
The U.S. and China plan to reschedule trade-deal talks postponed from last weekend aimed at reviewing progress at the six-month mark of the agreement between the world’s two biggest economies, according to a person familiar with the matter. While the date hasn’t been set, the review will take place soon, the person said. The video-conference call between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin never made it on to official public calendars in Washington or Beijing, even as the South China Morning Post reported it was first planned for Aug. 15. On Tuesday, President Donald Trump said he called off the talks, raising questions about the future of a deal that is now the most stable element in an increasingly tense relationship. Adding to troubles, Trump is threatening to slap TikTok-style sanctions on more Chinese companies and Alibaba may be next in line. Still, growing competition at home is the e-commerce giant’s bigger challenge for now.
Guidance Hesitance
U.S. central bankers backed off from an earlier readiness to clarify their guidance on the future path of interest rates when they met in July, according to minutes released Wednesday. “With regard to the outlook for monetary policy beyond this meeting, a number of participants noted that providing greater clarity regarding the likely path of the target range for the federal funds rate would be appropriate at some point,” the minutes showed. It’s a subtle change from the previous set indicating policy makers were keen to sharpen their so-called forward guidance “at upcoming meetings.” Since the last meeting a number of Fed officials have indicated there is less need to offer new guidance so long as the coronavirus pandemic is significantly holding the economy back. The Federal Open Market Committee next gathers on Sept. 15-16.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Asian stocks as well as U.S. and European futures came under pressure Thursday after Federal Reserve minutes signaled tempered optimism about second-half growth and as Sino-American tensions simmered. The dollar held on to a rebound.
Stocks fell in Japan, China and Australia, with Hong Kong and South Korean shares underperforming. A drop in S&P 500 futures signaled Wednesday’s weakness may continue after the Fed noted the health crisis would “weigh heavily” on economic activity and repeated its view that the recovery path depends on virus containment. The greenback built on gains that came after a five-day selloff. Gold pared an overnight fall. Treasury yields ticked lower.
Having mentioned 3399 a few times we have had the reaction off it for the SPX bears, and that has dragged the FTSE down to the 6010 level overnight. Initial support for today is there now and shorting the rallies on the higher timeframes looks to be the play for the moment. With the overnight weakness the 2 hour chart has gone bearish and has resistance at 6066 to start with today. We also have the daily pivot and the 30min coral for resistance at the 6078 level so if we get an initial rise (and an attempt at the gap close) then a short there looks to be worth taking.
Now the S&P has dropped off the 3399 level, it should test the 3340 level where we have the bottom of the 20 day Raff channel. This pullback is necessary to get away from the overbought RSI, and sets ups. rally for the year end towards the 3500 level. And ahead of the November election. Initially today we have bounced off the 10 day Raff channel support at 3351 so we may well see a rise and dip pattern on this today as well. 2 hour resistance on this is now at 3390 so a rally to there this morning then a drop down towards 3340 or lower would make sense graphically.
We have also seen some headlines about the growth rate of Apple, Tesla, Amazon etc. Mostly driven by the Robinhood “traders” piling into stocks they like. It’s worth keeping an eye on the Nasdaq as a whole as that might well give a clue on when things are getting a bit toppy. Using the usual rule of media headlines as well, that time is now….
Back to the FTSE and should the bulls break the 6080 level then 6097 is the 200ema and above that 6114 is R1. I cant see it going much above this today but you never know, and if it did, then 6150 and 6215 are the next 2 levels of note.
For support, if the bears break the overnight low at 6006 then 5965ish is the next main support levels with 5923 below that.
So looking at a rise and dip to play out today, with a test of that 6080 resistance area and then a further slide to 6000. Good luck today.
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