At the time of writing, the FTSE 100 was up on the day and trying to claw back Friday’s losses following President Trump’s tweet ordering American companies to find an alternative to China. However, the trend remains bearish below the August 20 high of 7233, and until the price takes out the high, the price might trade lower in the weeks ahead.
Pressuring the FTSE 100 are gains in GBPUSD as most FTSE 100 firms derive their profits from outside of the UK, thus gains in the GBP tends to suppress profits, while GBP losses tend to boost them. Also, pressuring the FTSE 100, are all the same factors containing stocks worldwide: the escalating trade-wars between the US and China, economic contraction in critical countries such as Germany, UK, and economic slowdown in China and USA.
Technically, the trend will remain downwards below the August 20 high of 7233, and the next possible support level, and likewise take profit level of bearish traders is the 61.8% Fibonacci retracement level of the move from the December 2018 low to the YTD high of 7730 at 6975. Below 6975 the January 29 low at 6733 follows. For the FTSE 100 to resume its uptrend, the index needs to trade above the August 20 high, and if this were to happen the price might reach the August 9 high of 7303 followed by the July 25 low at 7461.Don’t miss a beat! Follow us on Telegram and Twitter.