Bearish overnight but rise and dip on the cards | 7540 7580 7603 resistance | 7440 7360 support

Bearish overnight but rise and dip on the cards | 7540 7580 7603 resistance | 7440 7360 support

FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 31st May 2023

The FTSE 100 closed lower in the first day of trading after the long weekend. The index finished the session 105 points or 1.38pc lower at 7,522.07 The decline came on the back of reports that shop inflation has reached new record as coffee and chocolate prices jump. Meanwhile, the mid-cap FTSE 250 index nudged up 0.07pc or 13 points to 18,807.37.

Asia’s stockmarkets slid toward a second month of losses in a row on Wednesday, and even the glittering Nikkei paused, as weak Chinese factory activity fed growing doubts about the post-pandemic recovery in the world’s second biggest economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1% in early trade and is down 2.4% in a month where hopes for robust Chinese rebound have run dry. Data showed Chinese manufacturing activity contracted faster than expected this month on weakening demand, with the official manufacturing purchasing managers’ index down to 48.2 against a forecast of 49.4.

The bears are seizing the moment as the “sell in May” gets underway at the last minute. We have had a bearish session overnight and the next key supports are 7440 and 7360 in play for the short term – possibly even both of them today!

End of month profit taking is also likely, as well as some fear creeping in about Fridays jobs report in the USA.

We could get an initial kick up first thing to retrace a bit of the overnight fall, and a rise towards the 7540 resistance area where we have the red 30m coral and the Hull MA on the 2h chart. This 2h chart is now firmly bearish as you would expect with the decline from 7630 yesterday and we are also just pushing below the 20d Raff as I write this. The bottom of the 10d Raff aligns with S2 at the 7440 level, so a possible bounce area here.

Above 7530 then 7600 is once again showing as resistance with the R1 and 30m 20ema here, though I am not thinning that we will be testing that level today.  But we do have the daily pivot and the Hull MA at 7560 as well – though the Hull MA is dropping of quite fast and could be nearer 7545 in a. couple of hours.

The S&P500 daily chart still has upwards heading Raff channels for some slight optimism and it is testing the green 2h coral at 4188 as I write this. If that holds initially then a rise towards 4212 may well play out (and also help an initial kick up on the FTSE100).

A few Fed speeches later as well so that may well add some volatility after the bell.

Not too much more to say really. A few levels to keep an eye on, and should it get as low at 7360 then I would expect a decent bounce here.

Good luck today.

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