FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 closed 0.6% lower to 7,176 as concerns over the Covid omicron variant caused weakness in energy prices as well as travel and leisure stocks. British Airways owner IAG and easyJet dropped along with Rolls Royce, which touched its lowest levels in nearly three months.
Odds on the Bank of England to raise rates today have increased following the data this week, although the consensus view remains that it will refrain due to the significant amount of uncertainty that omicron is creating as restrictions are reimposed.
Most Asian stocks and U.S. and European futures rose Thursday following a rally in U.S. equities on speculation that Federal Reserve policy tightening will help fight high inflation without derailing economic growth.
Japan led gains but Chinese technology shares were under pressure again in part on worries about U.S. sanctions amid tension between Beijing and Washington. S&P 500 and Nasdaq 100 contracts gained after technology shares powered Wall Street to a strong close, reversing initial declines following the Fed statement. European equity futures advanced more than 1%.
The U.S. central bank said it will double the pace at which it tapers bond purchases to $30 billion a month and projected three quarter-point interest-rate increases in 2022, another three in 2023 and two more in 2024. It also flagged economic risks from the omicron virus strain.
A gauge of the dollar held a drop and Treasury yields were little changed. Oil climbed and gold ticked up. In Australia, bond yields pushed higher after strong jobs data.
Doubling Down
The Fed is doubling the pace of tapering to $30 billion a month, and updated its projections to show a median forecast of three hikes in 2022, marking one of the central bank’s most hawkish policy pivots in years. A faster pullback means the Fed’s bond-buying program will end in early 2022, rather than mid-year as initially planned. The abrupt change of speed reflects “inflation developments and the further improvement in the labor market.” The S&P 500 closed near its all-time high after initially dropping when the Fed statement came out.
FTSE 100 live outlook prediction analysis for 16th December 2021
Buying the dip was certainly the right play yesterday as the Fed lit a rocket under the S&P and in turn the FTSE100. The S&P looks to be on track to make some new all time highs and we may well still get the 7500 year end on the FTSE100.
With the rise the 2h chart has gone bullish and we have decent support at 7210 for today so if we again get a dip and rise play out that level looks good for a long. We tested the 7162 lower support yesterday at the close, and the bulls defended that prior to the Fed, in a good sign that the FTSE will push on upwards as well.
Will just have to see how the Covid measures roll out over the next couple of weeks prior to Christmas as that may put a spanner in the works.
Below the 7210 support level then S1 at 7182 and a possible retest of the low yesterday would be on the cards, though the bulls will be keen to build on those foundations laid yesterday. The daily chart has remained bullish despite the dip yesterday so we should see a climb back towards the 7300+ level in fairly short order.
We do of course have the BoE today (and then OPEX tomorrow) to keep this week lively, with the BoE unlikely to make any changes just yet. News out at 12pm for them.
Above the 7262 key fib level (and also R1) then the bulls will be looking to get R2 at 7285 and 7300 above that as the round number. 7260 is the red 2h coral so the first line in the sand that they will need to break. As you know I am still looking for that strong year end, and now we have passed the seasonally weaker Monday and Tuesday this week we should see the bulls remain in control.
So, same plan as yesterday really – buy the dip and keep doing so! Good luck!
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership and Live Trading
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates
Keep up to date with new content, free sign up below
[yikes-mailchimp form=”4″]