Tuesday, May 21, 2019

FTSE100 - 21 May 2019


Fundamental Highlights

The FTSE ended lower on Monday as US-China tensions materialize and hurt investors’ confidence. The latest ban on Chinese telecom Huawei saw US companies comply and suggests that the trade dispute could get worse before it gets any better. The Footsie however held up better than its European counterparts as Brexit uncertainty maintains a weaker pound which in turn limits the extent of losses on the FTSE while US-china trade headlines act as negative catalysts on global equities. Today, the UK publishes inflation report and should determine whether the BOE is likely to raise interest rates which would see a rise in the pound and a decline in the Footsie. Moreover, trade headlines should be monitored as they hold a strong influence over market sentiment and price action.

Technical Analysis

The FTSE declined by 0.5% and ended at 7310 on Monday. The price found support at the 20-period MA around 7270 which be indicative of near-term direction in today’s session. A move below this level would suggest downside price action and bring into view support at 7240 and 7200. The upward trend remains intact so long as price finds support at the 7270 level, however a sustained move above 7320 would be required to indicate buying pressure while overcoming the resistance zone of 7360/7370 clears the way for further gains and target higher levels at 7400 and 7470.

Support: 7270/ 7240
Resistance: 7370/ 7400

Chart (H4)