FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
I hope you enjoyed the weekend.
The FTSE 100 ended the trading week on a slightly positive note, adding 0.1pc to 7,269. Traders were encouraged by decent retail sales figures and upbeat news about the efficacy of Covid boosters against the omicron variant.
U.S. equity futures, Asian stocks and crude oil fell Monday amid concerns about more omicron-induced curbs and after a setback for President Joe Biden’s economic agenda prompted Goldman Sachs Group Inc. to cut forecasts for U.S. growth.
MSCI Inc.’s gauge of Asia-Pacific equities was on track to fall for its sixth session in seven. Treasury yields dropped, gold edged higher and the dollar held a jump from Friday amid a mood of caution.
Traders were assessing the latest comments from U.S. Senator Joe Manchin, who left Democrats with few options for reviving Biden’s agenda after rejecting the roughly $2 trillion tax-and-spending package. Goldman economists reduced their U.S. economic growth forecasts in the wake of the senator’s move.
Fresh lockdowns in parts of Europe to stem the rapid spread of omicron are also unsettling investors and weighing on risk sentiment.
In China, banks lowered the one-year loan prime rate, a key benchmark of borrowing costs, for the first time in 20 months. Calls for easing had grown amid a property sector crackdown that’s weighing on economic expansion.
Omicron Spreads
Just a month after the omicron variant was reported in Europe, 12,000 cases were detected in the U.K. on Sunday, but experts say most cases are going undetected and real daily number may be above 200,000. Surging case numbers have left a number of EU countries tightening restrictions. Holland has locked down and the U.K. is warning that new curbs could be imposed by Christmas. Omicron has already become the dominant strain in Ireland. In the U.S. President Joe Biden is planning to issue a stark warning on the perils of remaining unvaccinated, while Elizabeth Warren tweeted she has tested positive for Covid. And China found another omicron case had sneaked across the border, while a cluster of local infections continues to grow. Finally, Cathay Pacific’s major shareholder said Hong Kong’s stringent quarantine rules were “killing” the airline.
FTSE 100 live outlook prediction analysis for 20th December 2021
Well its looking a bit of a ropey start as the fears over restrictions and possibly lockdowns have come to the fore once again. We have gapped down (7230 gap area) to start with so we could see a small climb up towards that but as the picture has changed (and its changing quite rapidly) its back to shorting the rallies to start with this week. The S&P has also opened bearishly today and could well be on for a slide down to the daily support at 4515 initially, with 4470 below that.
The FTSE100 may well see a slide down to the bottom of the Raff channels at the 7040 area, and they also tie in with the 200ema on the daily at 7043. Should we see this area then we could get a bounce here. 7100 is also round number support on the way down though – and as such could see some brave bulls appear here.
As I write this the bears are just breaking through the S3 level for today at 7153 so it will be interesting to see if we do get some rallies to sell. Of course, we also have lower volume/thin liquidity this week as we run into the Christmas period, which amplifies the chop and the moves as well.
The resistance levels that I am looking at are a backtest of the S2 level at 7191, and we also have the 25ema on the 30m here, so initial reaction at this level if we get an early pump to start with. Above this the S1 level of 7214 is the next key level, but should the bulls break this then 7230 as mentioned, and then 7250 above that. This latter level is the 200ema on the 30m and also a red 30m coral, along with the daily pivot, so we may well see the bears launch off this area should we get that high today. Seems a big ask currently though!
With this weakness the daily chart has gone a bit bearish again, with the moving averages crossing over to bearish position again, so the bulls will need to break and hold 7230 really to undo that.
With the current slight disarray in terms of hospitality and people self imposing lockdown so they are not at risk of having to isolate over the Christmas period we are seeing a bit of uncertainty in the markets as well. Going to be a tricky week/month or 2 for the hospitality sector. Of course this is going to be the case every winter for a long while yet as new variants appear.
Anyway, tricky start to the week when it opens so far off the pace to start with but does look like a sell the bounce sort of day as we possibly drop down towards that 7040 Raff support area now. I have gone for maybe a slightly optimistic chart for today with a couple of bounces up to backtest the broken supports but could just as easily steadily trend down all day. Maybe best to do lower stakes today and see how it plays out! December hasn’t been too bad trading wise so far so not a week to risk throwing away profits.
Good luck today.
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