FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Stocks and US equity futures fell Tuesday amid escalating US-China tension over Taiwan and deepening worries about a global economic slowdown, risks that supported demand for havens like Treasuries.
An Asian share index slid the most in three weeks, with some of the steepest falls in Hong Kong, China and Taiwan. US and European futures were also in the red as July’s equity market rebound stumbled into August.
Asia stocks continued a decline from Wall Street on Tuesday, and U.S. long-term Treasury yields sank to a four-month low, pulling the U.S. dollar down against the yen and other currencies as investors worried about the risk of global recession.
There were also jitters about an escalation in Sino-U.S. tension with U.S. House of Representatives Speaker Nancy Pelosi set to begin a visit to Taiwan against the objections of China, which regards the self-governed island as a breakaway province.
Australian equities declined amid an uncertain outlook for commodity demand – which also weighed on crude oil prices – while the local dollar hovered near its highest versus its U.S. counterpart since mid-June with the central bank widely expected to deliver a third consecutive half-point interest rate hike later in the day.
U.S. e-mini stock futures pointed to a 0.31% lower restart for the S&P 500, which stumbled 0.28% overnight.
The week began with China, Europe and the United States reporting weakening factory activity, with that in the U.S. decelerating to its lowest level since August 2020.
That sank crude, with Brent futures edging down to $99.74 on Tuesday after losing almost $4 overnight. U.S. West Texas Intermediate futures also eased to $93.67, extending Monday’s almost $5 slide.
FTSE100 live outlook prediction analysis for 2nd August 2022
Nice little new month money kick up yesterday to get as high as 7470, however the bears then drove it back down as yet more political tensions flare up. This time over Taiwan. No surprise there really as thats been simmering for years. Australia have raised their interest rate by 50bps, and we will likely see the BoE do the same.
Initially today we may well see a rise to regain 7400, and test the 7425 resistance level where we have the daily pivot and the now red 30m coral. 7434 is also locked in as the 2h Hull resistance level.
To start with we are on the S1, 200ema and key fib support at 7378 hence thinking an initial climb from here.
Above the 7435 level then the bears will be on the back foot again as the bulls will be looking to drive it up to 7470 again, and possibly as high as R2 at 7504. That feels a big ask for today though and I am mostly expecting a bit of a bear Tuesday to play out.
We are still due a drop down to test the daily 25ema which is at 7294 for today, which would fit that daily chart well now its gone bullish. Again, it may not get to that level today though, as we have S2 support at 7347. That said, that 25ema does align with S3 (7300) but a 200point drop from this current level seems a bit much.
S&P500
The bulls will need to defend the 4088 key fib level today and need to break above 4120 where we have the daily pivot and the red 30m coral. If they do so then a rise to test the high of yesterday at 4145 would be likely, and then more upside towards the daily 200ema at 4180. However, the 2h chart has gone bearish and has the 4135 level as resistance from the Hull MA. 4085 is also the green 2h coral so I would like to see this level defended on any weakness today.
Good luck. A bit of sideways action really as we are in the slow summer month of August, and whilst we await the latest BoE interest rate news on Thursday
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