7400 tested overnight | How long can it last | 7421 7475 above | 7365 7340 7320 support

7400 tested overnight | How long can it last | 7421 7475 above | 7365 7340 7320 support

FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

The FTSE 100 pushed higher on Thursday as the pound dropped on disappointing GDP data that cast doubts over the post-pandemic recovery.

The blue-chip index rose 0.7pc to 20-month highs as it shrugged off figures showing that supply chain troubles stunted economic growth in the third quarter.

Miners provided the biggest boost, making gains amid relief that troubled Chinese property giant Evergrande narrowly averted a default on its debts once again.

The picture was less upbeat for sterling, however, which plunged to a fresh 2021 low against the dollar as the downbeat GDP outlook compounded inflation fears.

Asian session
Stocks rose along with U.S. equity futures Friday, bringing some relief for shares from the inflation fears still roiling Treasuries.

MSCI Inc.’s Asia-Pacific gauge posted its biggest rise this week, helped by Japan’s bourse and China’s technology stocks. The view that the worst of Beijing’s regulatory blitz has passed salved sentiment. U.S. and European contracts climbed after the S&P 500 snapped a two-day fall.

Five-year notes led a continued selloff in Treasuries after a trading holiday. The spread between 5-year and 30-year yields shrank, at one point to the narrowest since March 2020. A rout hit bonds Wednesday after the fastest U.S. inflation in three decades stoked bets on faster monetary tightening.

The dollar held a rally in the wake of the inflation print and caution triggered by a U.S. warning that Russia may be weighing a potential invasion of Ukraine. Oil and gold slipped, while Bitcoin was steady.

FTSE 100 live outlook prediction analysis for 12th November 2021

The FTSE100 is remaining resiliently bullish despite the weakness on the S&P which is treading water around the 4650 area. Overnight it has tested the 7400 level which is the top of a downward channel from before the pandemic, so is a fairly key level. That said most key resistance levels this week have been broken without too much pause!

Above the 7400 level then we have R1 and the key fib at 7421 and as such we could see a stutter here on any early rise. There are certainly a lot of bears being squeezed as the client sentiment on IG has had the majority of their customers short since 7000! Interestingly though we are also coming into the first proper test of the top of the Raff channels at the 7420 area as well and as such that lends weight to the bears having a crack here. Whilst its also a Friday and we may well see some profits being banked. For the new members, I usually say thats its best to be a bit more cautious on Fridays as they can often be a bit strange! Lower stakes and less risk is the order of the day.

If the bulls can break the 7420 level then the next key level is the 7475 daily resistance. I have plotted a path to that in case the S&P decides to do a Friday ramp as it has in the past and pull away from the 4635 support level to try for the 4665 area where we have the 2h resistance. The US bulls will be keen to recapture some key levels to try and end the week on the front foot, 4660 being one of those levels.

On the bearish side, we have initial support at the daily pivot at the 7364 and then 7340 below that. Should we slide 60 points to test that 7340 level then a long here is worth a go as we have cluster of support there, namely the 200ema S1, key fib and daily support. They may well try and defend the pivot initially though.

I have put a few more orders in the plan than usual as there are a few interesting looking levels on the FTSE100 today. Doing the lower stakes will also enable a couple of extra trades.

Below 7340 then 7320 and ultimately S2 at 7276 would be the next key levels, though I am not expecting the FTSE100 to get mega bearish today unless that Russa / Ukraine situation ramps up, along with a sell of in the US. I do think they will try and defend the 4635 level though on the S&P.

So, whilst it looks bullish we are still on “extreme greed” and also near the top of the Raff channels neither of which is good for long term longs at this price. We may well see some cooling off before more upside towards the end of the year, though the FTSE100 seems to be on a one way street this week! The seasonal weakness is manifesting itself better on the S&P. Usually lasts a week or 2 then the bounce kicks in if history is any guide!

So, watch 7400, 7420 and 7475 as key resistance. 7365, 7340 and 7320 as key supports.

Good luck and have a great weekend.

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