Havens sought; FTSE 100 losing upside momentum…

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The fact the G7 meeting is now being coined as G6+1 indicates how far the gulf is between the US and other countries.

Investors are naturally perturbed by this. After a week-long rebound many traders are again seeking safe havens assets on Friday. Equities softened; USD rose; while bonds rallied. Some profit-taking in momentum sectors (especially technology) are in order.

With the Nasdaq 100 Index, if the current weakness persists a ‘failed break’ is possible, which may lead to a test of the near-term support at 7,000.

For the FTSE 100 Index, the failed upside renewal at 7,800 and the subsequent weakness towards the lower side of the range suggests more trouble ahead. The near-term support at 7,600 appears flimsy, hence a test of this level next week may occur if the weekend G7 meeting turns acrimonious. On a domestic note, UK retail stocks, such as Debenhams, are under increasing pressure following House of Fraser’s restructuring.

Overall, the bears have yet to cave in. We would not rule out choppy trading ahead.

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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.

Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.

Jackson has a PhD in Finance from Durham University.

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