Monday, September 16, 2019

FTSE100

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Fundamental Highlights

London’s blue chip index managed to trade 0.31% higher on Friday as US-China trade relations seemed to improve while hopes of averting a no deal Brexit rose. On trade news, President Trump expressed consideration for reaching an interim trade deal while China announced further exemptions on US products from tariffs and aided the risk on mood. Meanwhile in the UK, PM Johnson continues Brexit negotiations with EU officials in attempt to reach an agreement ahead of the deadline. Today, risk appetite may turn negative as geopolitical tensions heighten following weekend reports of attacks on Saudi oil fields. The news boosted oil prices which may provide the FTSE’s oil majors with support. Though there are no major economic releases out of the UK today, China’s disappointing industrial production data may weigh on the index alongside geopolitical tensions and offset any higher potential from the oil majors. Today, traders should look to Brexit and trade developments to influence price action while geopolitical tensions maintains a risk-off mood.

Technical Analysis

The FTSE added 22 points to end at 7367 on Friday. The price managed to trade through the 50-day and 100-day MAs around 7350 which will continue to determine the FTSE’s outlook. Look for a sustained move above 7350 to maintain buying pressure and lead price to test the resistance at 7400 and 7420 with a break above 7380. It is worth nothing that while the daily RSI reading is trending higher, the 4H RSI has neared the overbought territory suggesting that the FTSE may turn lower. A trade below 7350 would indicate selling pressure while a break below the 7300 level of support near the 20-period MA would signal further weakness.

Support: 7350/7300
Resistance: 7400/7420

Chart (H4)
FTSE100