FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 dropped on Friday as fears over surging inflation and a looming economic slowdown grip global markets. The blue-chip index tumbled 1.5pc with most sectors losing ground, putting it on track for a weekly loss.
It came a day after the Bank of England warned inflation will jump above 10pc later in the year as soaring energy bills push up prices further. It also forecast a contraction in the economy in 2023, fuelling fears of a recession. The jitters took hold across Europe, with Germany’s Dax and the French CAC 40 down 1.6pc and 1.7pc respectively.
Stocks fell anew Monday and the dollar climbed as high inflation, monetary tightening and the prospect of an economic slowdown spurred another bout of risk aversion.
An Asia-Pacific equity gauge shed 1.5%, U.S. and European futures retreated and sovereign debt was under pressure — providing little respite for investors after the fifth straight weekly decline in global shares and bonds.
Russian Oil Ban
Leaders of the Group of Seven most industrialized countries pledged to ban the import of Russian oil in response to President Vladimir Putin’s war in Ukraine. The heads of the leading economies made the commitment after holding a video call with Ukraine President Volodymyr Zelenskiy on Sunday. Several G-7 countries have already pledged to diversify away from Russian supplies. The U.S. and U.K. have already announced bans on Russian oil imports and Germany has backed a proposal for the EU to get rid of it by January. The pledge is also the furthest that Japan has gone in committing to halting Russian oil purchases.
Bear Case
Losses in equity markets are spreading from risky stocks to steady earners. The S&P 500 fell for five straight weeks, its longest retreat in a decade and Asia stocks look set to come under pressure Monday. And the Federal Reserve’s most aggressive policy tightening in two decades is also sucking emerging markets into a “sell everything” slump. Bonds are not immune either. The relentless bear market in U.S. Treasury debt could see yields across much of the maturity spectrum on course to crack above their 2018 highs.
FTSE 100 live outlook prediction analysis for 9th May 2022
A weak start as I write this but I am thinking that we will get an initial kick up towards the 7400 area to start with so we can backtest the key fib support at 7396, along with the previous daily support level of 7400. There is also a gap here that could do with being closed at 7398. The bears will be looking to short the rallies still, and with the Dax and S&P500 both looking like a rise to the daily pivot and then a drop off playing out that could all fit in.
The bulls will of course be keen to put in a bull Monday today, though the S&P looks like a drop down to the 4050, and possibly even 4024 S2 could materialise today. Fear is certainly still driving the market at the moment as you know.
So, initial resistance is at 7400, and then the daily pivot at 7418 above that. 7470 is then the next key level of note and for a rise to there from the 7330 overnight test of the daily support means the bulls will have to really go for it – not impossible but I think that the 7400 area will be strong resistance. The ASX200 had a rise and dip session and it does look like we will do similar.
7485 is above that though that also feels a big ask!
For the bears, they will be looking to break that 7330 daily support level (and S1) as we could then see another test of the daily 200ema at 7311 – it was this line that the bulls sprung off on the 26th April (similar level, 7310, to get a rise then to 7620). I have put the long order slightly below in case we get an overshoot of this and a test of the round number. S2 is then at 7263 – possible though overnight that 7330 has held well. Another test in hours should also get a reaction.
S&P500 & Dax40
Similar story for these today with a suspected rise and dip too play out by the look of it. I’m looking at a test of the daily pivots – 4114 and 13716 – and then a drop off from there.
Good luck today.
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