FTSE 100 live outlook prediction analysis for 20th October 2020
Turned rather bearish yesterday as the S&P recoiled from the 3500 level again, and the FTSE 100 was also battered as the pound rose again above $1.30 with further Brexit talks looming. Wales are locking down for 2 weeks starting Friday, and Ireland are going for a 6 week lock down.
These were the main events:
- Pound passes $1.30 with further talks looming
- FTSE slips under pressure from sterling strength
- CBI urges PM to tackle impending skills crisis as job losses mount
- Flybe eyes return to the skies
- China’s recovery extends into third quarter as outlook darkens elsewhere
The S&P needs to defend the 3420 level really today as we have the green daily coral here and also more crucially the 25ema on the daily and a break of that will see the US move lower. Can stimulus save the day again?!
40 Million Cases
Global coronavirus cases exceeded 40 million, with the pandemic showing no signs of slowing. In the U.S., surges in battleground states like Wisconsin pose a challenge for President Donald Trump two weeks before he stands for re-election. Millions of Europeans face tighter restrictions on movement, with London, Paris and Vienna enforcing stricter curbs and Ireland enacting some of the region’s toughest measures. Iran again reported a record number of daily deaths linked to the virus, while the Philippines shortened its curfew hours and government scientists in India said the country may be able to contain the world’s second-largest outbreak by February.
Markets Sink
Asian stocks looked poised to follow their U.S. counterparts lower as chances of a fresh stimulus deal before November’s election faded and global virus cases surpassed 40 million. Treasuries slipped. Futures pointed to modest losses in Japan, Australia and Hong Kong. The S&P 500 Index fell to the lowest in almost two weeks. The 10-year Treasury yield rose to almost 0.77% and the dollar weakened versus major peers. Elsewhere, the pound jumped by the most since August at one point on a little Brexit optimism. Oil dropped after an OPEC+ meeting made no mention of any changes to a plan to further ease oil-output cuts from January.[Bloomberg]
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
U.S. futures edged higher Tuesday as investors held out some hope of a deal on stimulus talks. Asian stocks slipped after a weak session on Wall Street overnight.
S&P 500 Index futures climbed after a spokesman for House Speaker Nancy Pelosi said differences were narrowing in talks. Shares slipped in Japan, Australia and South Korea, and fluctuated in China and Hong Kong. European futures pointed lower. The 10-year Treasury yield steadied around 0.77% and the dollar held losses versus major peers. The yen dipped and the offshore yuan traded around its strongest since July 2018.
Earlier, the S&P 500 Index fell to the lowest in almost two weeks as time draws short to reach agreement on a bill that could pass by Election Day on Nov. 3. The Australian dollar slid after comments from the central bank’s assistant governor that short-term rates could fall below zero. Oil extended losses after an OPEC+ meeting made no mention of any changes to a plan to further ease output cuts from January.
The S&P ended up dropping right down to the 25ema on the daily chart at 3420 and that has held well so far with a 20 point bounce since last night. The bulls will be keen to defend this level as a break of that leads a lot lower. We also have the bottom of both the Raff channels and the daily 25ema at this level too for today so it will be interesting to see if the bulls can keep the momentum going. Rare to get a bearish Monday so we may well see a reverse of bear Tuesday now and a subsequent bounce.
It’s certainly a positive sign that the 3420 level has held on the S&P. It will need to break 3473 now as we have 2 hour Hull moving average resistance there.
Overnight the FTSE tested the 5850 level and we also have the key fib for today just below this at 5845. We are starting off with a bit of a bullish rise as I am writing this with a possible climb towards the daily pivot at 5895 looking likely. We also have the 30min coral just below this pivot at 5887 and the 200ema just above at 5905. As such there is initial resistance at this level so we may well see any early rise falter here. I am expecting a dip back down to the 5840 level if we do, and this is also just above S1 which is at 5827 today.
On the FTSE 100, the bulls will be looking to take it up to 5930 if they break above the pivot and possibly R1 at 5942. Might be a big ask to get above that on its volition unless we get US stimulus news that may well turbo charge the bulls.
If the bears break below 5826 then we will be looking at a move down to 5800 and probably S2 at 5779 below that. We do ahem the bottom of the 20 day Raff channel at 5798 though and I would like to see that hold as that channel is rising at the moment.
So, bit of a mixed bag but watching 5840, 5826, 5800 as the main supports (3420 on the S&P), and 5900 and 5930 as resistance.
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