FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 has continued its positive start to the year, pushing close to highs reached before the pandemic sparked a market shock in March 2020.
The blue-chip index gained 0.9pc to burst through the 7,600 points level for the first time since January 2020.
Sentiment was boosted largely by takeover talk after it was confirmed Unilever tabled an unsuccessful £50bn bid for GSK’s consumer healthcare arm. GSK topped the FTSE with gains of 4pc, while Unilever slumped 7pc to the bottom of the index.
The manoeuvres will fuel speculation of more mergers and acquisitions, with many FTSE-listed firms deemed to be undervalued.
Meanwhile, U.S. equity futures retreated and Asian stocks struggled Tuesday amid a jump in Treasury yields as investors girded for interest-rate hikes by the Federal Reserve to quell high inflation.
Treasuries fell across the curve, pushing two-year and 10-year yields up to levels last seen before the pandemic roiled markets. Pressure is growing for the Fed to act more quickly to contain price pressures, which are being stoked in part by a rally in oil that’s taken Brent crude to the highest since 2014.
Nasdaq 100 contracts fell about 1%. S&P 500 and European futures were in the red too. U.S. markets reopen later from a holiday. MSCI Inc.’s Asia-Pacific share gauge turned lower, though China hung on to gains in the slipstream of interest-rate cuts Monday that spurred expectations of more policy easing.
The dollar rose and commodity-linked currencies fell. The yen dipped after the Bank of Japan sat pat on policy while nudging up its inflation projection.
Supply Speak
Chinese President Xi Jinping called on nations to secure global supplychains and prevent inflation shocks, as he seeks a smooth path to clinching a precedent-defying third term in power. He also warned about global inflation pressures and the resulting effects of higher interest rates, while downplaying concerns about China’s economy, even after data Monday showed growth slowed to 4% last quarter, the weakest pace since early 2020.
FTSE 100 live outlook prediction analysis for 18th January 2022
After being closed yesterday and despite the FTSE100 pushing on above the 7600 level the S&P500 looks set to be a bit bearish today. Several timeframe charts are quite bearish including the 2h with resistance at the 4667 and 4676 levels so the bulls would need to break above this area if they are to see 4700 again. However the daily chart has now also locked in a bearish stance with 4693 resistance so keep an eye on that level as well. Any rise may stutter here. If the bears can break 4635 then it may well slide down to 4600.
For the FTSE100 today, we have a brief flourish overnight up to the 7627 level though if we do dip a bit today then that will just look like a stop hunt. The resistance at 7613 didnt get too much reaction yesterday and next up as looking key is the 7636 level. I think a short here is still worth a go if seen.
To start with the 7590 level is support on the 2 hour chart and we may well see an initial climb off this first thing. It feels like we might get a bear Tuesday though despite the US being closed yesterday which can upset the pattern! Lending support at 7590 is the daily pivot as well so the bears will be keen to break below this as it opens up a trip down to the 200ema at 7559, and the key fib at 7547.
Should the bears push lower than that then S2 at 7521 is the next level of note and the bottom of the 10d Raff at 7512. If the S&P bears go for it today we might have a bit of drop over the next 24 hours.
Generally it’s looking like a short the rallies day, especially as the S&P looks bearish on all timeframes, and that may well drive the others down with it.
The 30m FTSE100 chart is also bearish to start with 7603 25ema resistance so it will be interesting to see if we get the first attack from the bears at this level, though as mentioned the key for them is breaking below the 7590 level.
With the FTSE100 reaching these heady heights and popping through 7600 we may well see some profit taking kick in on that, especially as the US is flagging a bit.
So, all to play for today but shorting the rallies on the FTSE with 7613 and 7636 still the two main levels in play for resistance, 7590 and 7559 for support.
Good luck today.
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