UK100 joins the stock market roll over

UK100, Daily                   

U.S European stock markets are heading south, following on from losses in Asia overnight, where the Hang Seng underperformed with a -1.18% loss, while the Nikkei managed a 0.34% gain, as exporters were underpinned by a weaker Yen. Elsewhere the dip in energy prices weighed on oil related shares and after trying to move higher earlier in the session, the front end US Oil future is retreating again and has fallen below USD 50 per barrel. In Europe the DAX is down -0.25% and the FTSE 100 down -0.60%, despite Sterling continuing to slide against EUR and USD. Investors continue to hold back ahead of today’s ECB press conference and tomorrow’s U.S. jobs report, which will be watched carefully amid mounting speculation of a March rate hike from the Fed. Draghi meanwhile is trying to balance the growing rift of opnion among council members as today’s updated set of staff projections are likely to bring upward revisions not just to the inflation, but also the growth outlook.

The continued weakness in the UK100 prompted a short position on last nights close. An entry was taken this morning at 7315 with target 1 7225, which is the confluence of the 23.6 Fibonacci level, 50 day moving average and the lower Bollinger band. Target 2 is at the 38.2 Fibonacci level and the 2017 low at 7100.  Today’s weakness has breached and broken the 20 day moving average which will potentially attract more short sellers should the index close below this key moving average. The parabolic SAR remains positive, the RSI at 49 is neutral, however, the MACD also turned negative on Tuesday and today has broken the 0 line. A break of the 7400 level would suggest more upward momentum.


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Stuart Cowell

Senior Market Analyst


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