FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 ended higher Wednesday as energy and mining shares rallied on the back of higher commodity prices and Compass Group posted a strong earnings report. The blue-chip index closed 1.4% higher to record its best session in more than a month. However it again fell after the bell, revisiting the days low at 7230, and an overnight low of 7225 and testing the key fib support. That saw a small bounce overnight but it has since fallen back amongst another sea of red to start the day.
Stocks fell Thursday after elevated US inflation bolstered the case for aggressive monetary tightening and sparked a slide on Wall Street.
An Asian share gauge lost about 1%, European futures retreated and US contracts made modest gains. The S&P 500 Wednesday hit the lowest since March 2021 and the technology-heavy Nasdaq 100 shed about 3%.
The Treasury curve has flattened on concerns that Federal Reserve monetary tightening will trigger an economic slowdown. The 10-year US yield slipped to 2.90%, the dollar was firm and oil dipped.
Hong Kong intervened to defend its currency for the first time since 2019. Digital tokens stabilized from a plunge a day earlier, victims of ebbing liquidity and evaporating demand for speculative assets. Bitcoin is down 17% this week.
US inflation moderated but topped expectations at 8.3%, signaling persistent price pressures. Traders raised bets the Fed will roll out another half-point interest-rate hike in September following similar increases in June and July. Russia’s war in Ukraine and China’s Covid lockdowns are creating shortages and stoking costs.
Fed officials appear to be sticking with their approach of raising rates by a half point at each of their next two meetings. But Fed Bank of Atlanta President Raphael Bostic said he’s open to boosting borrowing costs to restrict economic growth if inflation persists at elevated levels.
Taking Aim
China has blasted the World Heath Organization chief as “irresponsible” after he criticized the country’s all-out efforts to stamp out the virus that have left it increasingly isolated on the world stage. Tedros Adhanom Ghebreyesus argued a day earlier that the zero-tolerance strategy was unsustainable. But China appears to be caught between a rock and a hard place. On the one hand its economy is unlikely to recover while lockdowns continue to disrupt business and livelihoods, while on the other, abandoning the policy now could cause 1.6 million deaths from Covid-19, according to new research. Meanwhile in Hong Kong businesses are being crushed by a refusal to open up the borders. It’s all a far cry from the normality returning to the rest of the world.
FTSE 100 live outlook prediction analysis for 12th May 2022
That was a great day yesterday with level to level trading on the FTSE and both the trade levels working perfectly. Shows I am looking at the right pattern. We are back into a bear market with these rips higher off the supports and bull and bear traps galore in play! For today we may well get an initial kick up and then some more downside later, as the S&P500 breaking below 4000 isn’t a great sign for the bulls!
Initial support today is at S1 at 7209, and we have the Hull MA on the 2h as support just below this at 7199. As such we may well see the bulls quick out the blocks and a rise towards the 7281 level where we have the daily pivot and the 30m coral now red.
Above this though then the bull will be targeting the 30m 200ema at 7314 and possibly R1 at 7327. Yesterday’s high at 7350 is just above this and then R2 at 7399 – that seems a big ask today though, especially as the S&P has 2h resistance at the 3950 level now and the bulls may struggle to push past that today.
Support wise, we have the 7200 as mentioned though below this then the bears will be looking to take it down to the 7163 S2 level and the bottom of the Raff channels remain in play for the moment at the 7050 area for the 20d. Don’t think we will get that low today though.
GDP data has just been released and the UK economy grew by only 0.8% in Q1, down from 1.3% in the previous 3 months. Staglaftion back on the agenda!?
It will be interesting to see if the bulls can defend the 7200 2h support level this morning (or today in general in fact) as if they do manage that then it bodes well for some more upside to end the week. With cable dropping down towards the 120 level it has certainly helped to support the FTSE100 in general (as lots of FTSE100 constituents earn their money in dollars).
The Dax40 looks more positive as well compared to the S&P with a bullish 2h chart and support at the 13460 area – so keep an eye on this.
As mentioned above the 2h S&P500 chart is bearish with 3950 being the levels that the bulls need to break. We may well see the bears have a go off this level later.
Good luck today.
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