FTSE 100 Evaluation: Bearish Outlook Constructing

FTSE 100 Evaluation: Bearish Outlook Constructing

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FTSE 100 Evaluation and Speaking Factors

  • Awaiting FTSE 100 Pullback
  • China Slowdown Dangers Rise

Just a few days in the past, I mentioned a few technical areas of note within the S&P 500 the place I’d count on the index to battle to realize additional upside traction. Since then, the index has faltered on the 200DMA located at 4327. Now whereas we’ve got seen a modest 2% pullback, extra work must be completed earlier than bearish momentum can choose up, equivalent to a break under the late Might/early June highs (4180-90).

Elsewhere, I’m additionally retaining a really shut eye on the FTSE 100. In contrast to its counterparts, the index has basically in a broad 6800-7600 vary all year long. Nevertheless, now that we’re approaching the highest of that vary round 7600-50, this can be a very good space to search for a pullback. One of many causes is the truth that China slowdown dangers are coming again to the forefront of buyers’ minds, be mindful the FTSE 100 is way more uncovered to China than its counterparts on condition that index heavyweights are throughout the commodity area. A gauge of Chinese language sentiment might be checked out via the lens of FX with the Chinese language Yuan. As proven within the chart under, USD/CNH is testing its 2022 peak and thus a agency breakthrough is prone to immediate a recent wave of risk-off sentiment and I’d count on the FTSE 100 to come back beneath stress.

Supply: Refinitiv

Now on this subsequent chart, maybe I is likely to be committing a chart crime right here, however right here is an overlay of USD/CNH inverted vs the FTSE 100, which exhibits that USDCNH has tended to fall notably earlier than the FTSE 100. Main indicator or only a spurious correlation?

FTSE 100 vs USD/CNH Inverted

FTSE 100 Analysis: Bearish Outlook Building

Supply: Refinitiv

For many who are affected person, the opportune second might be to await a pullback from 7600-50. My view of in search of the FTSE 100 to drop could be unsuitable ought to we shut above 7710.

FTSE 100 Chart: Day by day Time Body

FTSE 100 Analysis: Bearish Outlook Building

Supply: Refinitiv





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