FTSE nears key levels

5 October, 2017

It was a day of highs and lows for the UK economy as the political speech from the prime minister did little to quell rumours she may not survive the election, and there could potentially be talk of a second referendum. However, there was positive news with UK PMI m/m up slightly to 55.8 (55.6 exp) showing some expansion in the purchasing managers index. Something that the market will be happy to see with bets increasing on the potential November rate rise. The real winner though out of all of this has recently been the FTSE 100 which has been climbing on the back of equities globally as they continue to rally, and also the positive economy data as of late. A weaker pound has provided some windfalls for large companies and the reporting out today has been positive thus far compared to expectations.

For the FTSE traders though there is one barrier which may stop the bulls in their tracks and that comes in the form of current triangle consolidation pattern we are seeing. This is a common pattern and traders on the FTSE tend to always take notice and play of these key levels/barriers. While a positive day today and with many traders expecting higher highs the FTSE has been slowing down as it approaches the trend line and traders could look to start sell-off around the 7500 level. In the event we saw a breakout higher, then I would anticipate resistance at 7551 but this would also be a very bullish signal. Support levels can also be found at 7436 and 7319 with the 200 day moving average a likely candidate to stop traffic if data is slow.

Oil was another key player today as the weekly Department of Energy data was released showing that oil inventories showed a steep drawdown of -6.02M barrels. This beat expectations of -0.5M barrels, but the market was not quick to react and in fact we saw a small drop in the price of oil. Counterintuitive; yet  caused by a build up in gasoline, lending to the idea that Americans might not be using as much as previously expected in the lead up to winter. The market is likely to remain quite strong in the interm as OPEC production cuts have had the desired effect on the market, but the battle to remain above $50.00 a barrel continues to be waged.

For oil traders there has been a drop on the chart as the bulls have lost some ground on profit taking and some strong levels of resistance. So far oil has dropped just under the resistance level at 50.21 and is looking all the more bearish. In the event it did drop lower, I would expect strong support at 48.73 and 47.72 as both levels have seen plenty of action over the past year. A swing higher in the market is likely to find very strong resistance at 52.10.


Source link  
Dollar index drops after US retail sales contraction

The Dollar index (DXY) immediately fell by some 0.2 percent, dropping below the 98.0 psychological level once more...

Dollar's fall halted at 98.4 support level

The Dollar index (DXY) fell by about 0.38 percent before paring back losses, as the 98.4 support level kicked in. Although the September US inflation...

Dollar paring early October losses

The Dollar index (DXY) continues to pare losses seen earlier this month, as investors await the minutes from the September FOMC meeting...


Gold hammered by resurgent Dollar

Gold tumbled more than $30 on Wednesday, almost breaking below $1500 as political uncertainties in the United States and Brexit...

Time to prepare for 100 in the Dollar Index?

The Greenback is on a tear and the breach above 99 in the Dollar Index makes 100 look very appetizing on the menu. The stunning run of buying...

Time to expect a jump to $60 in WTI Oil?

The breaking development that transpired throughout the weekend, where attacks on Aramco Oil plants in Saudi Arabia could take away up to 5.7...


Risk sentiment brightens

A wave of optimism is sweeping across financial markets with stocks in Asia pushing higher on renewed optimism over a potential breakthrough...

Pound regains mojo on positive GDP

It has not been a bad start to the trading week for Sterling which is standing tall against every single G10 currency as of writing. Mildly encouraging remarks...

Gold finds comfort near six-year high

Everyone wanted to piece of Gold yesterday after US manufacturing activity decelerated in August for the first time in three years...

  


Share it on:   or