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FTSE100 live outlook prediction analysis for 18th January 2023
Asian markets whipsawed Wednesday in the wake of the Bank of Japan’s policy meeting, with many Asian equity indexes swinging between gains and losses while Japanese stocks rallied alongside a sharp drop in the yen. US share futures and Treasuries reversed earlier declines and a gauge of dollar strength rose after the BOJ kept its monetary settings unchanged. The yen depreciated as much 2.6%, the most in almost three years.
Bit of a cheeky stop hunt on the FTSE100 yesterday, dropping to 7830 before climbing back to the 7880 level, having tested the 7845 support level. As such there is still buying appetite and we may well see the S&P500 try and hold above the 4000 level today, following the move up to 4015 yesterday. It dropped back from there but I wouldn’t be surprised to see it have another go today.
UK CPI data has just come in on target at 10.5%, just below the 10.7% previously. The market was hoping for a beat of the estimate though so it remains stubbornly high for the moment. Even yesterdays news of a tick up in wages failed to light the bulls rockets with much gusto.
Initially today we are starting with a slide and that may well go as far as the 7820 level where we have decent support from S1 and the 200ema on the 30m. Thats also below the 10d Raff channel so the bulls will be looking to defend any drop to keep the price in the upward channels.
Below the 7820 then the daily support level at 7756 is the next major target though 7795 is the key fib and as that is just below the round number we could see that hold.
Resistance wise then we still haven’t tested the 7895 level and as such that level should still get a reaction of seen. Not actually that far away for today….. A rise to the 4021 S&P500 level may well help the FTSE bulls realise that goal. Above that then R3 at 7912 and a move through the round number would bode well for further upside, and I am sure “they” would like a test of 8000 before too long, if for no other reason that to generate some positive headlines.
The treasuries coffers are in a much better position now too, after the BoE disclosed that it had dropped all of the £19.3 billion of gilts purchased last autumn to stabilise the UK debt market. Added to that, the Bank said it had made £3.8 billion in profit from the affair. This cash will eventually make its way to HM Treasury. The warmer than expected winter means that the cost of the Government’s support for households’ energy bills is likely to be less than expected.
Having lowered the expectations over the past few months with the doom and gloom will the government be favouring now the “under promise and over deliver” mantra…..
Anyway, slight digression there….. Still looking bullish on the FTSE, Dax and S&P for the moment, and I am expecting any dips today to get bought up. Seems to be the pattern this week so far!
Good luck today.
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