Monday, October 8, 2018

FTSE100 - 09 October 2018


Fundamental Highlights

The FTSE fell by 56.6 points and closed at 7240.6 yesterday, as a mixture of negative factors pushed the index lower. On one hand, Oil prices weighed down on the index as President Trump considered granting waivers to sanctions against Iran exports. On another hand, Italy's escalating dispute over its fiscal budget plan with the Eurozone continues to push Italian yields higher (10-year bond yield rose to the highest level since 2014) with spreads widening between Italy's benchmark 10 year bonds and their German equivalent. Moreover, a tense exchange between the US and China’s top diplomats at the start of talks in Beijing yesterday did little to relieve trade war pressures. In economic news, BoE MPC Member Broadbent will be speaking at 14:35 GMT.

Technical Analysis

The FTSE registered a new daily low on a closing basis – since April 18th - with the MACD indicator forming a bearish cross; both signals are indicating strong bearish momentum. On the lower timeframes (4H-1H charts) momentum indicators are in oversold conditions, registering a decrease in negative momentum and bullish price divergences, indicating a possibility of a market retracement. An hourly close above 7262 will send the market higher to retest the resistance level at 7323.5, while a downward breach of the 7234.9 support level will have prices print new lows.

Support: 7234.9 7195.5 7101.1
Resistance: 7323.5 7386.9 7445

Chart (H1)