Can the bulls defend | Inflation data out 1330 | 7335 7399 resistance | 7243 7198 support

Can the bulls defend | Inflation data out 1330 | 7335 7399 resistance | 7243 7198 support

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

After briefly looking like it might recover a large part of the ground lost on a tough Monday, the FTSE 100 closed up modestly yesterday.

The FTSE100 gained 0.4% ending at 7,243 after trading as high as 7,311 earlier in the day. It made up some lost ground, but it is still around 150 points off where it started the week after dropping 2.3% yesterday.

Most Asian stocks rose Wednesday amid a China rally sparked by declining Covid cases, which spurred hopes that growth-sapping lockdowns could be loosened. Treasuries were steady ahead of a US inflation report.

Mainland Chinese bourses rose more than 1.5%, while technology stocks rallied in Hong Kong. New infections fell in Shanghai and the city reported none in the community. The cases were instead detected in quarantine facilities.

The US is “actively examining” new sanctions that would force Russia to default on its foreign debts, Treasury Secretary Janet Yellen has told senators. The Office for Foreign Asset Control is mulling dropping an exemption that has allowed Moscow to keep making payments on its international bonds, she said. Russia is due to make several payments on its bonds on May 27, but the temporary exemption granted by the US will lapse two days before, meaning it may automatically default unless the US acts.

Temporary Shift
U.S. spies believe Vladimir Putin’s decision to shift the focus of Russian military efforts to eastern Ukraine is probably a temporary measure to “regain the initiative” in the war. Top U.S. intelligence official Avril Haines told senators Putin was “preparing for prolonged conflict in Ukraine during which he still intends to achieve goals beyond the Donbas.” And following much speculation about Russia’s potential use of nuclear weapons, Haines said Putin is only likely to actually use them if he feels Russia faces an “existential” threat.

FTSE 100 live outlook prediction analysis for 11th May 2022

Lovely drop off the 7310 resistance level yesterday but the bulls have fought back from the 30m coral test at 7210 after the bell, with some more upside potential now the cards for today with a rise towards the 7340 area.

Initially we have resistance once again at the 7305 level with the key fib here and we could see a drop from here down to the daily pivot and 30m coral test again at the 7245 level. The bulls will be keen to build on the overnight momentum after the recent declines and get the price back above, (and hold) the 7300 level. With the bounce the 2h chart has gone bullish again now and the Hull MA is offering support at the 7230 level to start with, though the bulls will need to break the red coral at 7330 today.

Below the 7240 level then the 7198 key fib would most likely get tested and possibly S1 at 7174. With the overnight strength and a rise on Asian markets we may well not get this low though.

Above the 7340 level then the bulls would be looking towards 7400 once again and we have R2 here for today. Should they break above the 7340 level it does bode well for some further upside, and possibly a test of the 25ema on the daily at 7450 before too long.

On the news front today we have inflation data out of the USA at 13:30 with a forecast of 6% down from 6.5% previously for core YoY, and Aprils figure forecasted at 8.1% down from 8.5% previously. Be surprised if they do drop but we shall see!

So, feels like a buy the dip day today, with that 7250 area the key area to watch, along with 7335 resistance.

Good luck today.

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