Improved Risk Sentiment Drives Further Gains
Fiona Cincotta April 7, 2020 2:43 AM
Stocks are rebounding for a second straight day as risk sentiment continues to improve on tentative signs that coronavirus cases are leveling off.
Stocks are rebounding for a second straight day as risk sentiment continues to improve on tentative signs that coronavirus cases are levelling off.
The fact that the FTSE can advance despite the terrible data tells us that right now risk sentiment is more important than macro data. Risk sentiment is interested in coronavirus statistics and ultimately when lock downs across the globe can end. The sooner the lock down’s halt or ease, the sooner the recovery can begin.
However, there are growing concerns over the UK’s exit strategy. Testing here so far has been a complete failure. As we move past the coronavirus peak more attention will turn to plans to end the lockdown. The lack of a solid exit strategy could hit sentiment.
A stronger pound means the FTSE is slightly lagging its European peers in early trade. The Pound is rebounding despite Boris Johnson’s admission to the ICU at St Thomas’ Hospital. The government’s plan aimed at calming the public as the UK moves towards its peak in the coming days, appears to be working.
Levels to watch
The FTSE futures are pointing to a 1.5% jump on the open. The UK index trades above its 50 & 100 sma on the 4 hour chart. The price action remains within a horizontal channel since 25th March.
Immediate resistance can be seen at 5707 (high 31st March) prior to 5830 (high 26th March) a move beyond this level could see more bulls jump in.
Support can be seen at 5530 (50 sma) prior to 5360 (100 sma) and 5330 (lower bound on the channel).
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.