Bulls fail to break 7800 | Debt ceiling | Sell in May | 7707 7686 support | 7755 7803 resistance

Bulls fail to break 7800 | Debt ceiling | Sell in May | 7707 7686 support | 7755 7803 resistance

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

FTSE100 live outlook prediction analysis for 24th May 2023

The FTSE 100 closed 0.10pc lower to 7,762.95, while the mid-cap FTSE 250 index ended 0.34pc lower at 19,208.31.

Asian stocks retreated for a second day as an impasse in negotiations over raising the US debt ceiling hurt risk sentiment. The New Zealand dollar dropped after the central bank signalled its rate-hike cycle has peaked.  The MSCI Asia Pacific Index headed for its lowest close in a week, following losses of more than 1% for both the S&P 500 and Nasdaq 100 on Tuesday. Chinese stocks were close to wiping out this year’s gains on persistent concerns over geopolitics and economic growth.

Hawkish comments from Federal Reserve officials about the possibility of further rate hikes sent the U.S. dollar to a two-month high. Oil futures extended their rally. Minutes expected from the last Federal Open Market Committee meeting will offer traders the latest insights into whether the Fed will pause rate hikes in June.

Bulls failed just shy of the 7805 yesterday and as the debt ceiling dance continues the bears saw their opportunity to take it down to the 7707 support first thing today. This is the main daily support with 7690 once again just below that and then 7675 slightly lower down. We have had this before with the debt ceiling – it will get approved as they won’t risk the USA and then the bulls will strike. In the meantime we have this merry go round of faff! Makes a change from hearing about interest rates though!

We had the key fib for today at 7700 as well and then the 10d Raff channel bottom at 7694. Quite a few positive RSI divergence signals are also flashing on at the moment on the 30m chart, so I wouldn’t be surprised if we get a rise and dip play out today.

Resistance wise, then 7755 is the main one to start with as we have the daily pivot and 30m 200ema here, along with the now red 30m coral. As such we may well see a bearish reaction here, and then another slide down to 7700. Above 7755 then 7803 is the key fib for today and is close enough to a double top with yesterday as well. The bulls will need good news though to enable a 100 point rise, which may not come today. Debt negotiations usually go right to the 11th hour before being resolved.

Below 7690 then 7680 is S2 and 7635 for S3. However we do also have daily support at 7675 to keep an eye on.

The S&P500 bulls will be keen to defend S1 at 4125 though on any initial dip, and will need to push past the 4167 daily pivot level today to keep themselves in the game. The are also just testing the bottom of the 10d Raff channel at 4142 as I write this, so a false break of that could fit quite well. Traps a few bears then too!

So for today on the FTSE watching the 7690 level as initial support, and a possible bounce to 7755.

Good luck today.

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