Steve Miley

Tue, Aug 20

FTSE 100 Risks to the Upside - Key is 7268.5

Equities trying to base

* The trade conflict between the USA and China is still a dominant force for global financial markets, with heightened tensions creating erratic and volatile price action in August, with stock averages signalling medium-term weakness earlier in the month.

* However, China and the US have indicated the resumption of negotiations whilst US data has been firm the past week

* From a technical viewpoint, global equity average have been trying to form bottoms over the past week and here we focus on the UK benchmark average future, the FTSE 100.

FTSE 100 risks to the upside; key is 7268.5

A strong bull gap advance on Monday (7121.5-20) through resistances at 7193/95 to reinforce Friday’s positive consolidation and build on bottoming pressures from last week, keeping the risks higher again Tuesday.

We see an intermediate-term bear trend with the surrender of 7245.5, BUT with growing risks for an intermediate-term switch to a neutral range above 7268.5.

For Today:

  • We see an upside bias for 7179; break here aims for 7205 and maybe 7251.5 and key 7268.5.
  • But below 5-20 aims at 7099 and maybe opens risk down to 7062.

Intermediate-term Outlook - Downside Risks: We see a downside risk for 6998.

Lower targets would be 6872.5, 6516.5 and 6320.5.

What Changes This? Above 7442 shifts the intermediate-term outlook back to neutral; above 7666 is needed for an intermediate-term bull theme.

You can see more from Steve Miley, Academic Dean for the London School of Wealth Management and Kylin Prime Capital Senior Investment Advisor, here on FX Explained