Stimulus approved | Markets rally | Gold retreats | 5620 5800 resistance | 5335 5230 support

Stimulus approved | Markets rally | Gold retreats | 5620 5800 resistance | 5335 5230 support

FTSE 100 live outlook prediction analysis for 25th March 2020

The FTSE 100 soared 9.1pc in its biggest one-day jump since the financial crisis as hopes of a major US stimulus package spurred widespread buying. London’s blue-chip index rose more than 450 points to 5,446, with more than £110bn ploughed into Britain’s biggest listed firms. Major indices across Europe also surged, with the German DAX soaring by 11pc. The mid-cap FTSE 250 jumped a record 8.4pc, with only a handful of companies ending lower.

Wall Street also took flight. The Dow Jones and S&P 500 were both up more than 7pc when Europe closed. US Senate Majority Leader McConnell confirmed that a bipartisan stimulus deal has been reached; package is said to be worth USD 2.5trl.

Both indices were in the green all day, despite dire output readings that showed activity in the UK’s services sector had cratered due to the coronavirus outbreak.

Gold rose 4pc to $1,618 an ounce after Goldman Sachs told clients it was time to buy the “currency of last resort”. The bank predicted the precious metal could rise as high as $1,800 by this time next year – only $100 short of its record high hit in 2011.

Olympic Disruption
The Olympic Games are now the biggest global event to be disrupted by the coronavirus pandemic. Japanese Prime Minister Shinzo Abe, along with the International Olympic Committee, agreed to delay the Tokyo Games by a year, the first postponement since the modern games began in the 19th century. Meanwhile, Singapore and Australia are the latest in a long list of countries to expand on strict social distancing measures designed to stymie the virus by shuttering events, bars, cinemas, religious services and other non-essential services, while India imposed a national lockdown for 21 days. In other virus developments, the U.S. could become a new hub of the outbreak, the World Health Organization warned. Still, President Donald Trump said he’s hoping to have the economy open again by Easter. Also, China prepared to lift its lockdown in Wuhan, the city at the center of the original outbreak, while symptom-free cases suggest thew country’s problems are not over. Cases around the world have topped 409,000, leaving 18,246 dead, according to Johns Hopkins data. [Bloomberg]


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

That was a decent rise yesterday and it worked well getting some points from the resistance level as well. Overnight we have dropped off the top of the 10 day Raff channel already which is at 5516, however there is decent looking daily resistance above this at 5618. As such, if we continue to rise later towards that level we may well see a stutter here.

Initially today I am again thinking a dip and rise scenario as has been the case all week so far. I am looking at a drop down to the daily pivot at the 5332 level. Should the bears break below this though then we will likely test the 200ema on the 30min chart at 5215. But with the stimulus approval as the catalyst I am not sure that the bears can take it that low just yet. The US will certainly be keen to build on their rise so far, and the S&P is likely to want to rise towards the 2600 area. Now that it has pushed above the 2400 level then we should continue to see a decent rise in the short term towards that area – R2 at 2617 for today. Not sure it will get this low on the S&P but there is decent 2 hour support at the 2280 to 2300 area currently.

Should the FTSE bulls break above the 5618 level then 5800 is next up as major resistance and then a retest of the 25ema on the daily at 5950 – quite the bounce from the 4800 level. That would be the second test of that since the first test at 7490 on 5th Feb. Based on the below information that one of the members kindly provided, once the virus is under control in terms of spread then we should see markets recover. Lets hope so, as the alternative is pretty dire!

Things remain volatile but let’s see if we get a dip and rise play out today. Stay safe!

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