FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 advanced yesterday on hopes that China would ease its Covid curbs and regulatory scrutiny. The blue-chip index closed 0.7% higher, but lagged its continental peers as the pound jumped more than 1%.
Britain’s unemployment rate fell to its lowest since 1974 in the first quarter of 2022, but soaring inflation led to the biggest annual fall in real earnings excluding bonuses since 2013.
A rally in stocks cooled Wednesday amid a tough outlook in China and hawkish comments from Federal Reserve Chair Jerome Powell.
MSCI Inc.’s Asia-Pacific equity index came off session highs, though it remained up for a fourth day, the longest such streak since February. US futures dipped after the S&P 500 added 2% in a risk rebound Tuesday.
Technology shares lead a decline in Chinese markets. The nation’s Covid lockdowns are weighing on sentiment along with concerns that officials aren’t doing enough to ease a clampdown on digital-platform firms.
Treasuries pared an overnight slide, leaving the US 10-year yield at 2.96%. Bonds came under pressure after Powell said the Fed “won’t hesitate” to tighten policy beyond neutral to curb high inflation. The dollar edged up.
Oil was trading around $113 a barrel and Bitcoin dipped below $30,000.
Keep Raising
Federal Reserve Chair Jerome Powell, in his most hawkish remarks to date, said the US central bank will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat. The Fed chair repeatedly stressed the need to curb the hottest inflation in decades during a Wall Street Journal event. “There could be some pain involved to restoring price stability, but we think we can maintain a strong labor market,” Powell said. US consumer prices rose 8.3% in the 12 months through April, according to Labor Department, while the unemployment rate stood at 3.6%.
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FTSE 100 live outlook prediction analysis for 18th May 2022
The bulls managed to drive the price to the 7530 resistance area and then we hovered around there for a while before a small drop down to the 7490 level. The bulls have remained in control though as we hold above 7500 for the time being. The S&P is also coming into its key resistance at the 4115 level and should we see that today we may well get reaction here.
The 2h charts remain bullish for the moment and we have just had UK consumer price data out with a 9% rise, just below the expected 9.1%…. good news?!
The FTSE100 bulls will be looking to push this up towards the 7565 level where we have the key fib and R1 for today, and just below the 20d Raff at 7583. We could see a dip from this area, especially if that coincides with the S&P hitting that 4115 level, and a drop down from here would fit well. The ASX200 did a small rise and then dip and it feels like we may well do the same.
Above the 7565 level (and this is also just above the daily level of 7557 which should also be resistance in theory!) then we would be looking at the 7621 level as the next key one, along with 7609 for a test of the 10d Raff as well.
For the bears then they will be looking to break the daily pivot level of 7512 to start with today as that would open up a potential drop down to the 7465 key fib level. If that were to play out later on towards the close it could coincide with the rising green coral on the 2h. That’s down at 7400 currently but rising fairly steeply since Friday’s rally kicked in. Just prior to the fib, we have S1 at 7481, and again the bulls would be keen to defend the 7500 round number.
In a positive sign for the bulls we have moved above the daily coral line at 7500 and the daily MAs are both rising and could well get a bullish cross soon.
S&P500
Looks positive for a rise towards the 4115 and possibly the 4159 resistance levels. 4115 is fairly key so we may well see bears have a crack here. As per the FTSE100, the daily pivot will be initial support, at 4065 in this case. Below that then the bears will be looking to take it down towards 4030 S1 and the 200ema on the 30m. 4030 is also currently the Hull MA on the 2h but rising steeply so will be higher as the day unfolds. We also have the top of both the Raff channels at 4112 in play for today, hence why this area will be key resistance.
Dax40
If the bulls defend the pivot at 14181 initially then a rise towards the key fib at 14294 should pan out. Above that then 14360 is the top of the 20d Raff and 14365 for R1 so should see a reaction from the bears. Below the pivot then 14093 is the key support and worth a long.
Good luck today.
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