The FTSE 100 broke down significantly during the week, slicing through the 7000 handle, showing signs of extreme weakness. With the potential trade war looming, a lot of traders are selling first and asking questions later.
The FTSE 100 fell significantly during the week, slicing through the 7000 handle rather easily. On Friday though, we did start to see buyers come back, as the 6900 level offered a bit of support. Traders are getting spooked by the potential trade war between the United States and China, so it makes sense that we would see a bit of negativity in the stock markets around the world. Ultimately, I look at this market as one that will continue to be very difficult, because we do have higher interest rates coming in the United Kingdom, and of course we do have the fears of China and the US being entangled in something that will more than likely drag the rest of the world down with it. However, if we get some type of good news out of that situation, that might be reason enough to turn this market around. I think the rest of the stock markets that we follow here at FX Empire could have a positive influence as well, so the next couple of days could be very crucial, making this week’s candle something that you should be paying attention to.
If we do break to the upside, I would anticipate a move to the 7250 level. Otherwise, we will more than likely break down the 6600, probably in reaction to some type of negativity coming out of the mouths of either Chinese or American leaders, or perhaps an escalation of tariffs between the 2 countries.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.