Technical update FTSE 100 - down to trade deal

Friday, 10th May 2019 10:11 - by Rajan Dhall

Its always good news when your analysis works - http://www.lse.co.uk/blogs/expert/rajan-dhall/t4yygik2ri788ap/

I wrote the last article on the 1st May and it seems the level held nicely and now we are in a period of indecision that could be resolved tonight. 

The price fell short of hitting the 38.2% fib level and stopped at the 7200 support. Looking forward now the FTSE 100 bounced back after some late night optimism surrounding the trade negotiations between the US and China. 

Although the tariffs rose to 25% on USD 200bln of goods coming into the US from China the equities markets are higher today. It may be the case that a deal could be done aftermarket. If this is the case then 7500 could be the logical target, but on the downside, if a deal does not get done and China retaliates with their own tariffs keep an eye on the 50% level at around 7050-00.

On the chart below we have the 4 hour timeframe and I am looking for a break of the RSI trendline for confirmation of a bullish directional change. A key moment will be the US open as equities traders will have time to react to the news from Asia and Europe. Today we also have the latest CPI readings and it could be higher due to the fact that the tariffs may have had an impact on inflation. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.