Monday, July 22, 2019

FTSE100 - 22 July 2019


Fundamental Highlights

The FTSE traded 0.21% higher on Friday as it found support from markets’ expectations of 50 point rate cut following Fed John William’s speech. The index still held on to gains after dovish speculations were later countered by a Fed spokesperson. Moreover, news of Iran having seized a British oil tanker came after the FTSE’s close and should influence sentiment negatively today as geopolitical tensions escalate. On UK politics, the prospect of a no deal Brexit has been ruled out by Parliamentary votes and the new PM will be appointed tomorrow. We will look to any downside pressure on the sterling stemming from Brexit uncertainty and the latest UK-Iranian tensions to provide the FTSE with support.

Technical Analysis

The FTSE fluctuated between gains and losses before ending 15 points higher at 7508 on Friday. The price recorded an intra-day high of 7546 and later dipped to the support at 7475. The 20-day MA at 7509 should determine the FTSE’s near-term direction on the day. A sustained move below 7509 would indicate selling pressure and lead to a test of the support zone of 7475/7470, while a sustained move above 7509 would lead the FTSE to test the resistance zone of 7535/7546. Moreover, we will look to the 20-period MA at 7526 to provide dynamic resistance on the FTSE’s short-term downtrend.

Support: 7470/7450
Resistance: 7526/7535

Chart (H4)