UK FTSE 100 (.FTSE) reverses, global markets fall as US hits Brazil and Argentina with steel tariffs
The FTSE 100 tumbled to a 10-day low after shedding 0.8% in the wake of US president Donald Trump ramping up his global trade war by reinstating tariffs on steel imports from Brazil and Argentina.
The blue chip index fell 60 points to 7,289 joining eurozone markets and the Dow Jones, the latter of which dropped 130 points to below 28,000 but the really big losses were saved for Europe.
The German DAX, which is already suffering under worrying manufacturing data, tumbled 1.7% while the CAC in Paris sank 1.5%.
Delivering the tariff news via his preferred method of Twitter, Trump said that ‘effective immediately’ he would restore tariffs on all steel and aluminium imports from the Latin American countries. He claimed both had been ‘presiding over a massive devaluation of their currencies’ that was ‘not good’ for American famers.
Spreadex analyst Connor Campbell said markets had ‘done their best to maintain a positive outlook on the US-China situation, despite Hong Kong becoming a political pawn between the two sides’ but Trump has ‘added another couple of enemies to his trade war portfolio’.
Trump used his latest Twitter missive to once again attack the Federal Reserve, stating that it should continue to cut rates in order to counter the sharp falls in both the Brazilian and Argentine currencies.
CMC Markets analyst Michael Hewson said Trump ‘seems to have missed the point that the reason the currencies of both Brazil and Argentina are weak is not down to any deliberate or cunning plan on the part of either government’.
‘[It is] merely because both their respective economies are in big trouble due to bad governance,’ he said.
‘Unfortunately, little details like that, don’t appear to register with this particular president, which as an exercise in economic illiteracy, is hard to beat.’
The pound firmed after its earlier losses to trade broadly unchanged against the dollar at $1.2933.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 7,450.49.
The projected lower bound is: 7,119.79.
The projected closing price is: 7,285.14.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 41.6784. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 82 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -23. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 4 period(s) ago.
Rex Takasugi – TD Profile
FTSE 100 INDEX closed down -60.590 at 7,285.940. Volume was 22% above average (neutral) and Bollinger Bands were 41% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,342.98 7,289.14 7,317.66
Volatility: 13 14 13
Volume: 704,667,456 733,388,672 730,554,304
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FTSE 100 INDEX is currently 0.4% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .FTSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .FTSE and have had this outlook for the last 24 periods.