10th May 2019
Global stocks tumbled to a six-week low yesterday ahead of last-ditch talks to stop Donald Trump lifting US tariffs on Chinese goods worth hundreds of billions of dollars.
US tariffs on $200bn of Chinese goods will rise to 25pc from 10pc Friday after the Trump administration accused China of backtracking on commitments made during trade negotiations.
Liu He, China’s vice-premier, will hold crunch talks today in Washington ahead of the deadline as Beijing warned that it will retaliate to another hike in tariffs. Chinese state media revealed that negotiators from Beijing believe there is a “zero” chance of a deal being reached to stop the tariffs hike before the deadline.
Markets have been rattled this week by the sudden escalation in trade tensions with the stocks rout intensifying just hours before the tariffs deadline. The S&P 500 slumped as much as 1.3pc in early trade in New York while the Euro Stoxx 50, the eurozone’s blue-chip index, plunged 1.7pc. The FTSE 100 survived the worst of the sell-off, dropping 0.8pc.
FTSE 100 Trading Signals, Forecast and Prediction
It was a bit slow to get going but that was a lovely bounce off the 7200 support level yesterday, all the way to an overnight high of 7280. Its dropped back to the 2 hour support at 7220 overnight and had another bounce from there so far, so the worm might be turning on the FTSE now, though a lot will depend today on the US/China trade talks. Plus its Friday which is usually odd!
Generally though, I am thinking that if 7200 area remains as support the bull trend will resume. Yesterdays low was 7192, but there are a couple of decent supports at 7180 so if we were to get this low then I would expect to see a bounce here today. Below this then we are looking at the bottom of the 10 day Raff channel as the next main support area – sitting at 7135, with 7080 below that.
Once again we have a daily candle that has closed above the 200ema on the daily chart which is a further positive sign for the bulls (yellow moving average line on the daily chart below)
On the flip side, the bulls will be keen to push past the 7280ish area where we have the 200ema on the 30min, and also a key fib for today. If they manage that then the resistance level from yesterday is still valid today at 7310. That is the next upside target for the bulls. Break of this though and this drop to 7192 was just a pullback in the bull trend and we are resuming that charge upwards!
It will be interesting to see what the news flow is from the trade talks – and of course this will be moving the markets around a fair bit today as well. At 09:30 this morning we have UK GDP. This is an indicator for broad overall growth in the United Kingdom. Robust UK GDP growth signals a heightened level of economic activity, and therefore a high demand for currency. Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. The forecast is 1.8% – an improvement on the 1.4% previously.
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates