Monday, September 24, 2018

FTSE100 - 25 September 2018


Fundamental Highlights

Despite major M&A deals (Comcast/Sky, Rangold Resources/Barrick Gold) the FTSE 100 closed in the red yesterday at 7450.2 on account of the continued trade tensions and Brexit developments. The latest batch of tariffs from the US and China kicked in, dampening investors' risk appetite. The Chinese government confirmed that they will not re-engage in trade talks while the US continues to threaten them with additional tariffs. Moreover, the pound crawled higher adding pressure on the index as U.K. Brexit Secretary Dominic Raab commented that he was confident that the United Kingdom will make progress and eventually clinch a Brexit deal with the European Union. In economic news, MPC Member Vlieghe will be speaking at 08:40 GMT.

Technical Analysis

The FTSE is showing strong positive momentum as the price retraced less than 1/3 of the up move from September 18th to 21st. During today's session, the market breached the latest short term downtrend that had formed (awaiting confirmation on close of bar) and is testing the 200-period SMA on the 4H timeframe, while RSI heads north of 50 and MACD signals prepare to cross, moving from negative to positive. An hourly close above 7476.4 will push prices to retest the resistance level at 7502.2, while a breach of our first support level (i.e: short term downtrend back in play) will have price further retrace to our second support at 7419.6 (N.b: Fibonacci 0.618 level at 7400).

Support: 7441.4 7419.6
Resistance: 7502.2 7528.1

Chart (H1)