Virus fear ramping up | 7420 7390 support |7496 7515 7535 resistance | SPX support 3320

Virus fear ramping up | 7420 7390 support |7496 7515 7535 resistance | SPX support 3320

FTSE 100 live outlook prediction analysis for 10th February 2020

Global stock markets lost ground on Friday, as investors cooled off on equities after a week spent shrugging off worries about the economic impact of the coronavirus outbreak. These were the day’s main events:

  • Markets dropped, ending a string of recent gains as economists cut outlooks for global economy in the face of coronavirus
  • The US registered a big beat on non-farm payrolls, with 225,000 jobs added during January

More Than SARS

The coronavirus has killed more than 900 people, exceeding the global death toll from the SARS outbreak almost two decades ago. China is spending at least $10 billion to control the coronavirus outbreak and reaching out for medical supplies as the first wave of international experts heads to the disease’s epicenter. A cruise ship in Japan with 70 victims has the most infections outside China. Scientists modeling the virus in Wuhan predict infections may peak this month. Meanwhile, coronavirus cases traced to a business meeting in Singapore have reached three European countries after causing infections in Asia, raising fears of a so-called super-spreader event. A cluster of cases of the virus in France, Spain and the U.K. confirmed in the past day all appear to have links to a French ski resort where the infected people had contact with a British man who had just returned from the conference.

Market Open

Stocks in Asia were likely heading for a cautious start Monday after the best week since mid-December, with investors continuing to monitor the rising coronavirus death toll. Currencies were largely steady in early trading. The S&P 500 Index fell along with Treasury yields on Friday, when futures on equities in Hong Kong and Japan declined. Australian contracts were flat. Investors are taking stock of a large rally that last week propelled global stocks back to all-time highs.

Coming Up

Federal Reserve Chairman Jerome Powell address lawmakers this weekand the focus will be on the risks to the U.S. economy from the coronavirus. Elsewhere this week, China inflation data comes Monday. Producer prices probably were flat in January from a year ago, according to forecasts, after six months of declines. Thursday brings a gauge of underlying U.S. inflation, the core consumer price index. It’s expected to increase to 0.2% in January, a faster pace than in December.  China and the U.S. on Friday lower tariffs on billions of dollars of respective imports, as part of the trade deal signed last month.

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

The FTSE100 has been quite resilient so far with the coronavirus spreading, which is now getting to the stage where it is worse than SARS. We haven’t had a retest of the 7535 level that we dropped off from last week (it was the top of the 10 day Raff channel) but despite a drop down to 7420 last night the market has held up quite well.

Initial resistance is at 7496 today where we have R1 snd the key fib, but just above this we have the 2 hour resistance level at 7516 – this timeframe chart is now bearish after the weakness on Friday. Should the bulls break above the 7516 level, then 7535 is next up, but a break of this will likely lead towards a test of the 7593 – 7605 area where we now have the daily resistance. If cable continues to fall (it broke below 130 last week) then that will help underpin a rise in the FTSE100.

For the bears, they will be looking to get an initial drop in, as we are looking to open just below the daily pivot at 7468 and also at the 200ema level on the 30min at 7448. If they were to take an early lead then a drop down to the overnight low and S1 at 7416 looks possible. I am thinking that we would see a bounce here, but if not then a test of 7394 looks next up where we have the fib, and we also remain on a path towards the 7300 level. The bottom of the 10 day Raff channel is down at 7200 as well, and we have a 400 point spread on that channel now after last weeks move, and the daily moving averages are bearish still. We overshot the 7488 resistance level but have since dropped back, so the bears still have the upper hand, just about.

The S&P 2 hour chart has also gone bullish with 3358 resistance from the moving average. If the bulls can break that then a retest of the top of the 20 day Raff channel at 3380 is possible, before a possible leg back down towards 3250 (bottom of the 10 day Raff channel).

So for today, expecting a bit of a tentative bull Monday but watching the 7495 and 7516 for resistance initially. Support I am looking at 7416ish if we were to get an initial dip, but the futures bounce off the 7420 overnight low bodes well for more upside today.

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