- The Blue-Chip Index is Up 0.8%.
- Housebuilding Stocks Slide.
- National Train Strike Ahead for September.
The FTSE 100 steadied in European trade with modest gains of 70 odd points from session lows, having fallen by around 135 points yesterday. Markets appear to be taking a breather ahead of the US NFP Jobs data later today in which any expectation-beating print is likely to further strengthen the Federal Reserve’s hawkish stance heading into this month’s meeting. Today’s rise leaves the blue-chip index down 2.8% for the year, with no end in sight so far to the raft of challenges, volatility and uncertainty ahead.
Pressure on the UK market intensified this morning with the British Chambers of Commerce forecasts, in which they stated that “the UK is already in the midst of a recession, and inflation is on course to hit 14% later this year.” While the forecasts are less dramatic than others released in recent days, the warning from the lobby contains a powerful plea on behalf of British business for immediate action.
The New York Session: Forex Trading Tips
We had a host of corporate news out this morning with no respite for housebuilding stocks after HSBC (HSBA) downgraded the sector to send Berkeley Group (BKGH) 6% or 212p lower at 3377p and Barratt Development (BDEV) off 5% or 20.3p to 394.9p. With the pair expected to release trading figures next week the selling extends this year’s losses for Berkeley to more than 30% and to 47% for Barratt, wiping out all gains made since the pandemic lows. There was bad news for London-based fund group Ashmore (ASHM), that saw investors pull money as the company’s poor performance resulted in a negative return of some USD17 billion this year. This adds further woes to the wider fund management sector after a stellar 18 months since the pandemic lows.
In other news, UK train workers are expected to go on strike once more during the Labor party conference. The Transport Salaried Staffs’ Association said Wednesday that workers at nine train operating companies and track group Network Rail will hold a 24-hour walkout from midday September 26. The dates coincide with Labor’s annual conference, which starts in Liverpool the previous day as calls escalate for the Labor party to support the cause.
FTSE 100 Daily Chart – September 2, 2022
From a technical perspective, we have had a steep decline this week which isn’t surprising given the rejection last week as well as the weekly candle close. On the daily timeframe we have seen four consecutive days of bearish price action as we now trade well below the 20, 50 and 100-SMA with the gradients mixed and looking to turn lower. We have seen a slight bounce from the daily lo with there being a zone of support between the 7150-7000 key psychological level. If we are to maintain any bearish momentum, we would need a daily candle close below the 7070 area. A bounce higher here could provide an opportunity for sellers around the 7300 area which lines up with 50% fib level and the 50-SMA.
Key intraday levels that are worth watching:
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Written by: Zain Vawda, Market Writer for DailyFX.com
Contact and follow Zain on Twitter:@zvawda