No End In Sight As FTSE Resumes Sell Off
Fiona Cincotta March 17, 2020 4:59 AM
Blink and you missed it. FTSE pares early gains.
Blink and you missed it. The FTSE very briefly moved higher on Tuesday before resuming the sell off. The move lower comes after the Dow closed on Monday down 12.9% in its worst one day sell off in over 3 decades. US futures are managing to cling onto gains.
Governments across the globe put in more stringent restrictions to control the spread of coronavirus. As they do so, the greater the economic hit will be through this process. This still feels far to early to be calling the bottom of the sell off. Companies are still unable to quantify the economic hit that they expect.
Realistically we will only start to see meaningful moves higher in riskier assets when the coronavirus numbers start to improve. Until then investors will fear a recession in the first half of the year, as deep as in the financial crisis. With a depression also plausible.
UK jobs data is due today. Expectations are for unemployment to remain steady at 3.8% in the three months to January. Average wages are expected to tick higher to 3%, up from 2.9%. However, given the data was from before the coronavirus outbreak here, it will be considered as out of date.
Levels to watch
The FTSE is struggling to hold onto earlier gains. The index trades below its 50, 100 and 200 sma on 4 hour chart, a clearly bearish chart. Immediate support can be seen at 5220(today’s low) followed by 4840 (yesterday’s low).
On the flipside resistance can be seen at 5376 (today’s high) and 5700 (high 13th March). A move above this level could negate the bearish trend.
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.