FTSE 100 live outlook prediction analysis for 17th February 2020
European markets closed narrowly down overall on Friday, with the FTSE 100 the worst performer among the continent’s blue-chip bourses. Economic data released on Friday showed Germany’s economy was stagnant in the fourth quarter of 2019 – adding to fears Europe’s top economy could be inching towards recession. New data showed the German economy grew 0pc in fourth quarter of 2019, while a second estimate of Eurozone GDP found the weakest growth since first quarter of 2013.
The economic mood among Americans has reached its highest level since March 2018, according to the University of Michigan’s Consumer Sentiment index, which rose to a score 100.9 (versus a baseline score of 100, from January 1978). The increase was driven mainly by low unemployment and steady wage growth. It held up despite worries over the coronavirus, with UoM’s report saying reports of increased household income and wealth were more frequent than at any time since 1960.
IMF Warning
The head of the International Monetary Fund said the lack of deeper improvements in the global economic system is hindering what’s already an “anemic” outlook for growth, especially as the shock caused by the coronavirus further dims prospects for a pickup this year. “The monetary policy space is shrinking and the reliance on fiscal measures as well as on structural reforms to boost growth ought to be stronger,” IMF Managing Director Kristalina Georgieva said Sunday in a Bloomberg Television interview in Dubai. What’s missing is “a more aggressive swing in structural reforms.” As the virus’s impact raises the threat of disruption across supply chains, most major central banks are on alert but have yet to indicate that they plan monetary easing.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
U.S. equity futures rose with China’s stocks and the yuan, taking encouragement from pledges to support the nation’s economy. Japanese equities declined after a deep contraction in GDP.
Futures have risen ahead of todays session, and the S&P still looks to be on track to test the 3400 level mentioned last week. That may well see the FTSE 100 rise to test the 2 hour resistance level at 7457 initially, and we also now have a red coral on that time frame with resistance at 7485 and dropping off. The FTSE 100 daily chart remains bearish but the bulls are certainly defending the dips still. The daily coral has also gone red though for the first time in a while and shows resistance at 7565, so should we see that level then a short here would be worth a go. Might be a bit of a big ask to get that high today though!
If the bears do defend the 7460ish area this morning then a drop down to the 7400 area looks likely, along with a possible test of the Friday low at 7388. That said we do have a cluster of decent looking supports around the 7370 level and with S1 also here we may well see a bounce here. The bulls failed to break above the first of our resistance levels at 7470 on Friday, and couldn’t manage the 7500 level, and we dropped off quite sharply from there on Friday. That said the S&P bears will need to get the reaction going at 3400 if we see it otherwise that looks like its going to get higher still! The Raff channels are both heading upwards still, with the top of the 20 day at the 3450 area currently.
So, looking at a possible mixed bag today, bit of bull Monday to push up towards 7455 initially, 7485 above that, but we may well see bearish reactions at those resistance levels.
The USA is actually on a public holiday today for Presidents Day, so the algo’s may well take the S&P up to the 3395/3400 level and then stall around there. Might well make the movements on the FTSE a bit more lacklustre too.
So, looking at 7455, 7485, 7505 as the main resistance levels, 7400, 7370 as the main support levels. Good luck today!
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