FTSE pauses in step with Chinese shares
Signs of a pause in Chinese markets should be a cue for the same in the FTSE.
Share this:
Signs of a pause in Chinese markets should be a cue for the same in the FTSE.
The FTSE 100’s ultra-clean rising trend line from December lows suggests it still has a lot going for it on the upside for the near term. The rising 21-day exponential average confirms encouraging medium-to-short term sentiment. This should take precedence over the slower-to respond 200-day trend, which is drifting lower.
But are these signals enough? In the same way that it may be too soon to call a definitive rebound in Chinese growth, it may be too soon for the FTSE to re-take critical highs from last year.
The benchmark (and derivatives like City Index’s UK100) is still rising into formidable resistance comprised of highs that were fiercely rejected in the autumn. Furthermore, the Stochastic Momentum Index (SMI) oscillator has recently failed to confirm the strength of recent gains. Note the market’s 2019 high of 7487 on Tuesday occurred when the SMI had already rolled over from overbought readings. A line of lessor resistance, pun intended, might well lead lower. The clearest nearby support may be 7370-7365, the range expressing highs on 21st and 22nd March.
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Silver Analysis Can XAGUSD hold above the 85 level
Recent price action in silver has been particularly relevant, as over the last five trading sessions XAG/USD has posted a significant gain, accumulating an increase of more than 18% over this period.
USD/CNH Forecast: New Year, Same Yu-an Strength
USD/CNH has been trending consistently lower within a bearish channel since the start of November, falling 2500 pips from near 7.14 to closer to 6.88 now – what are the levels to watch next?
FTSE 100 and GBP/USD forecast: UK data gives BoE March cut a further boost
The FTSE 100 edged higher to close in on last week’s record, as the pound weakened following the release of UK wages and Jobs data that puts a March rate cut firmly on the table, barring any surprises in tomorrow’s inflation report. Unless we see a sharp turnaround in data, I would be expecting another rate cut in June, and possibly more in the summer if inflation risks ease. This should keep the longer term FTSE 100 forecast firmly supported and keep a lid on sterling.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.