Tuesday, September 24, 2019

FTSE100

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Fundamental Highlights

London’s blue-chip index traded 0.26% lower on Monday as weak manufacturing PMI figures out of Europe highlighted the region’s economic slowdown and maintained a risk off mood. In the UK, Brexit sees little progress and today’s court ruling on PM Johnson’s decision to suspend parliament could undermine his efforts to lead the UK out of the EU with a deal. On global trade news, the US and China have made little progress in their latest meetings and President Trump’s recent comments suggested that a trade deal was nowhere in near sight. Thus, uncertainty on Brexit and the US-China trade situation persists and subdues risk appetite. Following yesterday’s dire PMI figures out Germany, market participants will look to German business sentiment figures today to provide further insight into the nation’s deteriorating economic conditions. Apart from the data, influence on market sentiment will reside in geopolitical headlines.

Technical Analysis

The FTSE broke below the ascending trend line and reached a low of 7284 before reversing some of its losses to end 18 points lower at 7326. Today, look to the levels bounded by the 20 and 50-period MA to determine direction on the FTSE. Failure to respect the 7300 level near the 50-period MA would signal further weakness and lead price to the lower support at 7265 and 7235 near the 100-period MA. On the other hand, holding above 7300 would maintain the FTSE’s consolidation phase. Meanwhile, a sustained move above the 7340 level near the 20-period MA would be required to indicate buying pressure and lead to a re-test of the higher resistance at 7380.

Support: 7300/7265
Resistance: 7340/7380

Chart (H4)
FTSE100