FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
UK stocks ended lower Monday as data showed the economy slowed more than expected in February, intensifying worries about a cost-of-living squeeze.
Gross domestic product rose by 0.1pc in February, down from a 0.8pc increase in January.
The FTSE 100 closed 0.7pc lower, pulling back from its strongest level in nearly two months, while the domestically focused FTSE 250 midcap index declined 0.3pc.
Asian stocks dipped Tuesday, while a selloff in bonds left the 10-year Treasury yield at the highest since 2018, as risks from high inflation, tightening monetary policy and China’s Covid outbreak ripple across markets.
MSCI Inc.’s Asia-Pacific equity index fell for a second day, with Japan underperforming. U.S. and European futures were in the red following a Wall Street retreat Monday that pushed losses in the technology-heavy Nasdaq 100 past $1 trillion in the past five sessions.
China’s approval of the first batch of new video game licenses since July eased some of the concerns about Beijing’s gaming-sector curbs, but the market reaction was restrained. Tencent Holdings Ltd. was among firms to climb.
U.S. Treasuries declined, taking the 10-year yield past 2.80%, as the global bond rout continued. A dollar gauge is on its longest winning streak since 2020. Both trends reflect expectations that the Federal Reserve will implement its fastest tightening since 1994. Australian and New Zealand debt also dropped.
Oil rebounded after a tumble that saw crude erase most of the gains sparked by Russia’s invasion of Ukraine. China’s virus outbreaks and mobility curbs, in pursuit of a controversial Covid-zero strategy, are imperiling demand.
Markets Fall
Everything from stocks and bonds is falling again — even oil has pulled back from near records — in a concerted cross-asset selloff. The S&P 500 fell 1.7% on Monday, while the Nasdaq 100 declined 2.4%, bringing losses for the tech index to over $1 trillion in the past five sessions. In Asia, stocks look set for a cautious start, with futures slipping in Japan and Australia. The next major test for markets looms later Tuesday, when the U.S. is expected to unveil an inflation print for March of more than 8%.
‘Bloody Phase’
The U.S. sees “a more protracted and a very bloody phase” as Russia’s invasion focuses on Ukraine’s Donbas region, said Pentagon spokesman John Kirby. He noted that an initial shipment of 100 Switchblade drones arrived in the region as the EU urges member states to send more weapons. German Chancellor Olaf Scholz said the country is providing more military support without giving any details. More than 10,000 civilians have died in Mariupol since Russia’s invasion, the city’s mayor said. Austrian Chancellor Karl Nehammer, the first EU leader to visit President Vladimir Putin in Moscow since the start of the war, said he’s pessimistic over peace prospects.
FTSE 100 live outlook prediction analysis for 12th April 2022
We have the US CPI data out this afternoon (1330) and the forecast is 6.6% YoY versus 6.4% previously. As such we may well see a bit of a volatile and choppy day today, though the bears have definitely got the upper hand for the moment. Inflation is also due out, forecasted to rise to 8.4% from 7.9% previously. Gold front ran the sell off again yesterday and has dropped back a little since, suggesting we could see a rise on equities initially.
The FTSE100 is also just sat on the bottom of the 10d Raff channel at 7555.
That would fit the charts quite well with a rise to test the 2h resistance levels at 7630, 4440, 14090 on the FTSE, S&P and DAX respectively.
For the FTSE100, we have dropped to test S1 and the key fib at 7555 as I write this so we could well see an initial bounce from here to test the 30m resistance levels at 7600. We have the 200ema and the red coral here. Just above this at 7630 currently is the 2h Hull MA as mentioned. 7613 is also the daily pivot so could fail just shy of that 2h level. A rise and dip would follow what the ASX200 did today.
Above the 7630 level then the bulls would be looking for 7660 where we have the key fib, and then 7700 again above that. Seems a big ask against the current backdrop.
Talking of which some reports suggesting that Russia have used chemical weapons now in Mariupol.
For the bears they will be looking to break below that 7550 level as that will open up a test of the 7500 level and finally a test of the 25ema on the daily that I have been watching for a while. 7524 is S2 in the way first though which could see a reaction but if the sell off gathers pace the bears will be looking to capitalise. 7473 is S3 below that, and could tie in with the S&P sliding to the 4360 level which looks good support on the daily and the 30m
S&P500
Again a rise and dip may play out with 4440 looking like decent resistance. 4458 and 4477 above that. If the bears break 4389 then 4360 is S2 and also the bottom of the 10 day Raff and the first test of the daily coral since it went green. In theory that level should be decent support if seen. Just depends how the US reacts to the CPI figures.
Dax40
Looking for a test of the 14100 level initially hone a drop from there – 30m coral and 2h Hull MA resistance at this level. Above that then the daily pivot at 14146 and 14200 for the 200ema above that. Bears will be looking to break to 13890 S2 and possibly even S3 at 13733 – which is also the bottom of the 10d Raff.
Summary
Stay nimble today as it may be choppy and volatile! Rise and dip distinctly possible today with a bear Tuesday being the theme. Good luck today.
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership and Live Trading
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates
Keep up to date with new content, free sign up below with just your email address