Bulls surrender overnight with 7060 7039 7012 support | 7140 7203 resistance

Bulls surrender overnight with 7060 7039 7012 support | 7140 7203 resistance

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

The FTSE 100 closed in the green despite paring some of its earlier gains, as a rally in crude prices saw energy stocks surge. London’s leading index added 0.4pc to 7,152 at the end of the trading day.

A bounce in stocks reversed in Asia Wednesday and the dollar climbed amid ever-louder warnings about the risk of an economic downturn. Asian stocks slipped in volatile trade on Wednesday, failing to extend Wall Street’s rally as persistent worries about interest rates and inflation remained a key focus for investors, while the Japanese yen hit a fresh 24-year low against the dollar.

US futures declined as brief optimism from a Tuesday jump in the S&P 500 and Nasdaq 100 petered out.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1%, but was still up 1.39% on the more than five-week low it hit on Monday. Tokyo’s Nikkei gave up early gains and was flat. Chinese technology equities were among the worst performers.

Investors are continuing to assess how worried they need to be about central banks pushing the world economy into recession as they attempt to curtail red hot inflation with interest rate increases.

The main U.S. share benchmarks rose 2% overnight on the possibility the economic outlook might not be as dire as thought during trade last week when the S&P 500 logged its biggest weekly percentage decline since March 2020.

In a sign Wall Street may not be able to repeat Tuesday’s rally, S&P 500 and Nasdaq futures both fell over 0.5%.

Chinese blue chips lost 0.4%, Hong Kong’s Hang Seng Index fell 0.9% and Korea’s KOSPI was down 1.78%.

U.S. Federal Reserve chair Jerome Powell is due to start his testimony to Congress today with investors looking for further clues about whether another 75 basis point rate hike is on the cards at the Fed’s July meeting.

Most other global central banks are in a similar situation, apart from the Bank of Japan, which last week pledged to maintain its policy of ultra-low interest rates.

Recession Warning
Elon Musk, the world’s richest man, told Bloomberg he sees a probable recession in the US; left doubts about his commitment to a $44 billion takeover of Twitter; and said he hoped to unveil a humanoid robot to the world by the end of September. In an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum, Musk also spoke of his need to trim Tesla’s workforce and explained why he would keep supporting Dogecoin.

FTSE 100 live outlook prediction analysis for 22nd June 2022

Despite a decent session yesterday for the bulls overnight, we have had a bit of a drop back overnight and the futures have dropped down to nearly test the 2h Hull MA support line at 7060. The 2h coral is green now too with 7050 as support so the bulls will need to be quick out the blocks this morning to defend this area.

If they do so then we may well get a rise towards the 7150 area where we have some key 30m resistance. Namely the pivot, red coral and just above the 200ema.

Below 7050 then the bears will be looking to 7012 where we have S3 and then the recent low at 6970 below that. With the price back below the 7000 level then the bulls certainly got beaten back down pretty quickly after Monday and Tuesday’s sessions and doesn’t bode well for much more bullishness!

Above the 7150 level then the bulls would be trying for that 7200 level again (shame it just missed yesterday, though makes sense now why it did!). 7203 is the key fib as well for today, and then the 7236 R2 level above that. R1 is at 7190 for today so there remains a cluster of resistance at the 7200 area.

Initial support is at the 3715 key fib, with 3701 below that. We still have a bullish 2h chart though 3700 would be the second test of the Hull MA, but the coral is green with 3672 support – may well see that hold if it got that low. 3676 is also S2. A rise toward the pivot initially at 3750 would fit the 30m chart well, but that brings in the red coral with 3762 resistance above the pivot. A rise and dip as the opposite to yesterday will probably be seen today.

Not too much more to say really. General fear being touted as the reason for the overnight declines, and we are still in “extreme fear” at 20/100 here

Looking to see if we get a rise and dip play out today but this 7050/7060 level looks key to start with.

Good luck today.

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