FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 dropped again on Friday, rounding off a tumultuous week for global markets amid fears of interest rate rises and the looming threat of war in Europe. The blue-chip index fell 1.1pc to 7,466, though it’s still set to record a second consecutive month of gains.
Banking stocks including Barclays and HSBC were the main drag on the FTSE despite higher yields, suggesting possible profit-taking by investors ahead of the Bank of England meeting next week.
To start the week, stocks rose Monday amid a rally in Chinese technology shares, while U.S. equity futures climbed as some of the angst over the prospect of tighter Federal Reserve monetary policy eased.
Asia-Pacific equities rose for a second day, helped by a rally in a Hong Kong tech index on bets that the worst of Beijing’s crackdown on the sector may be over. A clutch of markets, including on mainland China, are closed for the Lunar New Year holiday. S&P 500, Nasdaq 100 and European contracts pushed higher.
Havens including the dollar, the yen and Treasuries retreated. That suggested an improved investor mood compared with last week, when fears about receding Fed stimulus drove intense market swings.
Crude oil climbed, in part on the risk that any Russian invasion of Ukraine could roil energy flows. Gold continued to struggle.
China’s Woes Mount
China’s economy continued to slow at the start of the year, with manufacturing output slipping and Covid-19 outbreaks curbing consumer spending. The official purchasing managers’ surveys released Sunday showed a moderation in factory production and services in January. Separately, China picked blockchain technology trial participants, including 15 city governments and 164 other entities; China’s ambassador to the U.S. warned Taiwan was a “tinderbox” that could lead to military conflict between the two giants.
More Troops
Russia further boosted troop levels on the Ukrainian border this weekend, the Pentagon said, after Joe Biden pledged to send American troops to Eastern Europe. Meanwhile, U.S. lawmakers are close to finalizing the language for a sanctions bill that could include some penalties even if Vladimir Putin doesn’t send troops into Ukraine. The U.K. is looking for ways to target oligarch wealth held in the London property market, according to the country’s foreign secretary. The UN Security Council will debate the situation on Monday.
FTSE 100 live outlook prediction analysis for 31st January 2022
A decent recovery on the FTSE 100 Friday from the lows with support at the 2h coral area at 7410. To start the week the bulls have fought back a bit but the S&P is just coming into double top resistance at the 4454 level. As such we may well see a stutter here to start with (or just above to get some stops) and then a slide back down.
If the bulls were able to push past the 4460 level then we may well see a rise towards the 25ema daily resistance level at 4546 and this area looks good for a short to hold for a couple of weeks. If this is a short squeeze currently and it continues to there then we should see the bears reappear here in earnest so bear that level in mind.
For the FTSE I am thinking that we will get a push up towards the daily resistance level at 7600 today and with R1 at 7581, along with the round number, we could see a stutter here too – that level may well coincide with that rise on the S&P and it hitting the 4469 area at the same time.
If the bull were to break above the 7600 level then 7640 and 766 R2 are the next levels of note, with 7700 the next round number above that. I am not expecting us to get that high today even though the FTSE100 is being quite resilient still. I expect continued volatility this week as well. There are rumours of the Fed doing a larger 0.5% rate hike in one swoop next and if thats gains some traction we may well see the markets take a bit of a hit before rallying towards the end of Feb.
It’s the last day of the month as well today so we may well see some profit taking on any rises later.
More earnings from the tech companies this week along with the BoE on Wednesday and an expected rate hike to 0.5% – doubling the current 0.25%. Expect some chop around midday on Wednesday!
Support wise for today then the 7480 looks pretty key to start with as we have the 200ema on the 30m here, along with the 30m coral. Whilst this is still red if the price remains above this level that may well change to green this morning and become stronger support.
A break of 7480 and then Friday lows at 7420 are likely to be revisited, though the 2h coral has risen to 7450 now prior to that. A break of 7400 and the daily support that exists here will likely see a slide down to the 7370 next support level of note. Note sure that we will get that low either and a range of 7600 and 7400 for the start of this week would fit quite well. Bouncing around between them into Wednesday would fit the chart quite well.
So, all set for another interesting week! Good luck today.
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