- Summary:
- The FTSE 100 index and the DAX index are set to open lower today as traders worry about the new strain of the coronavirus. What next for the index?
The FTSE 100 index is off by more than 0.80% in the futures market as investors worry about the new strain of covid in the United Kingdom and the rising prospects of no-deal. The Footsie is trading at £6,421, which is below this month’s high of £6,643.
What happened: The FTSE 100 is struggling as worries of the new aggressive strain of the virus continues to spread in the country. That has led the Johnson administration to announce a new lockdown in England. At the same time, countries like Germany, France, and Belgium have also barred travel to and from the UK.
That’s a risky thing for FTSE 100 constituents because it will affect their sales. It could also lead to supply chain constraints in the near term.
What about Brexit: The index is also falling because of the probability that the UK and EU will separate without a deal. That’s because the two sides did not make any progress during the weekend and the fact that time is running out. As we have written before, a no-deal Brexit situation would be damaging to many companies in the FTSE 100.
What’s happening elsewhere: In Europe, futures tied to the DAX index are down by more than 1% while those tied to the CAC 40 have fallen by more than 0.50%. In the United States, the Dow Jones, Nasdaq 100, and S&P 500 futures are also wavering as traders react to the new stimulus deal by Congress.
What next for FTSE 100: On the four-hour chart, we see that the FTSE 100 declined sharply today. It moved below the important support at £6,489 and reached a low of £6,425, which was the lowest level since December 3.
The price has also moved below the 25-day and 15-day exponential moving averages. Therefore, with more negative news coming from the UK, it will likely continue to fall with the next key target being at £6,400.
FTSE 100 technical chart
