European closing: FTSE made a two-year low on Huawei arrest, closed at 6,704.05 -3.15%

The UK FTSE 100 dropped to a two-year low
The arrest of Meng Wanzhou, the chief financial officer of Huawei Technologies sent the FTSE 100 down 2.3% at 6,760.28, hitting its lowest level since December 2016 by midday.
The FTSE has closed at 6704.05 -3.15%.

Ross J Burland FXStreet

The UK FTSE 100 dropped to a two-year low just before midday on Thursday, tied in with the broad-based market selloff that has roiled markets and sparked trade war fears once again over the arrest of Huawei's chief financial officer.

Sino/US trade relations continue to drive markets and just in the same week as it might have appeared that Trump and Xi had started to work on a solution to their year-long trade dispute, as ambiguous as the cease-fire was, cannons are being positioned forward once again.

The arrest of Meng Wanzhou, the chief financial officer of Huawei Technologies, by the Canadian authorities sent equities off a cliff and futures selling was so intense at one point that circuit breakers were triggered.

The impact sent the FTSE 100 down 2.3% at 6,760.28, hitting its lowest level since December 2016, with only five companies' shares in positive territory. (FTSE 250 was 2.8% lower at 17,769.11).

The straw that broke the camel's back

The chief financial officer of Chinese telecoms company faces extradition to the US over possible violations of sanctions against Iran and China has urged both Canada and the US to "rectify wrongdoing" which has markets to a cliff edge again on Thursday as investors fear that this will break the cease-fire as Beijing responds with demands that may come beyond the realms of tariffs and into much broader economic and diplomatic conflict, with dire implications for global economic growth.

FTSE technicals

The FTSE is deeper negative on the charts with a series of long-bodied candlesticks. The index is now testing S2 at 6665 with daily ATR steepening into a strong trend. RSI is barely into over sold territory with room to go as well. A break of S2 6550 and 6500 at Nov 4th 2016 lows a few points higher. On the flipside, the pivot point is located at 7017 - 7016 was a prior low. R1 is located at 7074 and the 2018 range 23.6% level is located at 7100. The 38.2% Fibo of 2018's range at 7262 is the primary objective thereafter.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD hits fresh 2026 lows near 1.1570

EUR/USD adds to Monday’s heavy losses and reaches new yearly lows around 1.1570 on Tuesday. The pair’s deep pullback comes as the US Dollar extend its strong bounce, always propped up by the intense flight-to-safety environment amid the deteriorating geopolitical landscape in the Middle East.

GBP/USD attacks 1.3300, refreshing three-month lows

GBP/USD is deep in the red near 1.3300, accelerating its downside to renew three-month lows in European trading on Tuesday. The ongoing escalation in the Iran war, combined with rising Oil prices, weighs negatively on the higher-yielding Pound Sterling as the US Dollar capitalizes on increased haven demand.

Gold meets buyers around $5,000, remains under pressure

Gold comes under renewed and marked selling pressure on Tuesday, dangerously approaching the critical $5,000 mark per troy ounce, reversing at the same time four consecutive daily advances. The yellow metal’s bearish tone comes on the back of the increasing demand for the Greenback and investors’ repricing of Fed rate cuts.