FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The FTSE 100 dropped 0.8pc and dipped below 7000 again though the bulls managed to defend the 6990 level as expected. That has tee’d up a decent bounce so far going into today.
The European Central Bank said it will slow the pace of its pandemic bond-buying programme – also known as PEPP – in a tacit acknowledgement that the recovery in the 19 country euro area is strong enough to persist on less support.
The Governing Council said it had decided to conduct purchases at a “moderately lower pace” than the roughly €80bn (£68bn) of monthly acquisitions deployed in the past two quarters.
Officials also repeated a pledge to keep the €1.85 trillion program running until March 2022 or later if needed, in a signal that the bank is not yet ready to discuss when to end emergency stimulus.
Their stance differs from that of the US Federal Reserve, where policy makers are preparing to start a wind-down of asset purchases later this year.
FTSE 100 live outlook prediction analysis for 10th September 2021
Another test of 7000 defended and the bulls have managed to pull it up to the 7051 2h resistance level overnight. We could see a small drop off this down to the 30m support level at 7025 and just below the daily pivot before another bounce to start things off today.
Above the 7050 level then the bulls will be looking to get the price to the 200ema and key fib area around the 7080 area and again, we could see a stutter here. Either way they will be keen to keep the price above 7000 for as long as possible as a break of that will likely lead down to the 6940 area where we have the bottom of the 20 day raft channel for the moment.
The bottom of the 10 day Raff channel is a bit higher though at 6981 and just above S1 at 6978 so should we dip down to this area then I would expect that to hold the first test. It’s also just below yesterday’s low.
To start with its looking a bit more optimistic, though the S&P still needs to maintain some strength above the 4515 level where we have the 200ema for today. We dropped off that and the red 2h coral yesterday after the bulls had brought it back up so the bears maintain the upper hand for the moment. If we get some more downside on the S&P then we could see a slide to the 4476 level where we have S1 and just above the 4471 key fib level. We also have the daily coral at 4468 so should we see this area then we may well get a bounce here. The bottom of the 10 day Raff is at 4445 though lower down. If the bulls can push above the 4519 level (2h red coral) then 4534 is the key fib and a likely target and holding above here would lend some strength for next week.
For the FTSE 100, if the bulls can break above 7085 then we should get the 7100-7115 area, with a test of the 25ema on the daily chart here. Following the weakness this week that daily moving average set up has gone bearish and we may well see the bears reload here. If not and the bulls carry on then we should see a rise back towards 7200 next week. If we do drop off 7115 then we may well see more September weakness play out and a move below 7000, possibly the 200ema on the daily at 6885 area.
So, expecting more choppiness today so stay nimble. Good luck today and have a great weekend.
Asian stocks rose Friday as Chinese technology shares rebounded and Japan resumed a rally, bringing some relief from a bout of weakness in global equities this week.
Shares climbed more than 1% in Japan and Hong Kong, while U.S. contracts edged up. Chinese stocks fluctuated and the offshore yuan ticked higher as traders assessed a telephone call between President Joe Biden and China’s Xi Jinping amid an increasingly adversarial relationship between the two sides.
Chinese technology stocks rebounded in the wake of a clarification by a newspaper that China has slowed rather than frozen new game approvals, the latest twist in Beijing’s regulatory crackdown. China Evergrande Group was bolstered by a decision to let it renegotiate payment deadlines with creditors.
The S&P 500 overnight posted its longest losing streak since June, hurt by concerns about slower economic reopening due to the delta virus strain. Treasuries trimmed gains and the dollar dipped.
Global stocks remain in sight of record levels following a wobble this week on risks such as elevated inflation, a slower economic recovery and less generous monetary policy. The European Central Bank said it will slow the pace of its pandemic bond-buying in the final quarter of 2021, but President Christine Lagarde added that didn’t herald a winding down in stimulus. [Bloomberg]
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