Buy the dip if debt ceiling talks progress | 7626 7660 resistance | 7555 7533 7500 support

Buy the dip if debt ceiling talks progress | 7626 7660 resistance | 7555 7533 7500 support

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

FTSE100 live outlook prediction analysis for 26th May 2023

A gauge of Asian shares was on course to snap a three-day losing streak, buoyed by the tech sector, while US equity futures slipped after artificial intelligence stocks fueled a sharp rally in the prior session.  Benchmark indexes rose in Japan, South Korea, India and Australia, while those for mainland China fell. Hong Kong’s market was closed Friday for a public holiday.

U.S. President Joe Biden and top congressional Republican Kevin McCarthy are closing in on a deal to raise the United States government’s $31.4 trillion debt ceiling for two years, a U.S. official told Reuters, but time is running short.

The U.S. Treasury estimates it’ll run out of funds within a week and legislating any deal will take that down to the wire.

I am thinking that we will see a bit of optimism today and a bit of a rise across the board on debt ceiling resolution hopes, ahead of the weekend. As such a bit of “buy the dip” today would make sense and I am thinking that we may well see the overnight lows at 7565 hold for a push up towards the 7650 level.

7555 is also daily support with the bottom of the 10d Raff channel at 7533 below that. I would like to see the bulls defend the 7550 area really. Likewise with the S&P, the 2h chart is now bullish and I would like to see them defend the 4135 level which is where we have the Hull MA support.

The FTSE100 bulls need to break above the 7610 level early on as we have Hull MA resistance here on the 2h chart, with the red coral slightly higher at 7680. As such both of these areas may see a reaction. The bulls would certainly like to close the week out above the 7600 level ahead of the long weekend (bank holiday on Monday in the UK).

If the bears were to break below 7530 today though then a slide to 7500 would likely follow in fairly short order. That said I am feeling a bit more bullish today and the bulls look like they may well want to get the price above the 200ema on the daily at 7604. But need to hold it though!

As mentioned above the 2h S&P500 chart is bullish so a hold of 4135 bodes well for some upside. 4156 is the red 2h coral that needs break as that would then allow a rise towards the 4176 key fib for today.

I am thinking that once the debt ceiling gets sorted out we may well see a decent amount of buying. We do have a fair bit of news out from the USA today at 13:30 and 15:00 so expect some volatility around these times.

Not too much more to say really. Watch for the levels mentioned in the table above, trade well and cautiously today as its Friday. Have a great weekend and next email on Tuesday!

Good luck today.

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