None were spared the cautious nature of the markets after yesterday’s escalation of the ongoing trade war by the U.S. against China. The U.S. imposed $200 billion worth of additional tariffs on China as part of its protectionist strategy that Donald Trump has adopted. The European markets were not spared, as all the major indices from the DAX 30 to the CAC 40 saw a huge downturn, which was also reflected in the FTSE 100.

The British FTSE 100 futures Index saw a huge gap yesterday as did all the other indices dropping 60 points on the opening as it continued to move lower reaching the highly supportive line of 7,510 (Red Line) which has held the index from falling 3 times prior to this time making a total of four times that this level has held the index making it quite the level to beat.

The index has been able to bounce from this level previously, some have manifested in quite the moves upwards, however, this time was not one of them. As the index reached the mentioned support, it bounced upwards but was met with the 100-Hour Moving Average (White Line) which is currently acting as a short-term resistance for the index around the 7,550.

This is where things become interesting as an opportunity manifests itself. Currently, the index trades between the two mentioned levels of 7,510 and 7,550, should any of these two levels be broken in a significant manner, a trend could be set. If the index manages to continue to move higher, breaking above the 7,550, the next level of resistance is at the 7,580 represented by the 50-Hour Moving Average (Blue-Line), before attempting to cover the gap towards the 7,630.

On the other hand, there is significant downward pressure on the index, if the movement causes a break of the 7,510, then the next level of support is not seen until the 7,480, below that would mean that the index has found its new downward trend as the downside could stretch as far as the 7,400.

Looking at the FTSE 100 spot index, it is currently down 1.00% for the year as it trades 11% above its 52-week low of 6,866.94 reached on March 26n and 3.7% below its 52-week high of 7,903.5 reached on May 22. Of the 101 shares that constitute the index, 57 have risen, while 42 have fallen, leaving 2 relatively unchanged.

FTSE 100 Attempting to Break above 100-Hour Moving Average at 7,540
FTSE 100 Attempting to Break above 100-Hour Moving Average at 7,540

Currently, the best performers on the FTSE 100 are Paddy Power Betfair (+2.41% at £85.05); Sky (+2.07% at £15.25); and Micro Focus International (+1.52% at £12.02). The worst performers are Kingfisher (-0.92% at £3.03); ITV (-0.73% at £1.76); and Vodafone Group (-0.635% at £1.82).