FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 rose for a fifth straight session yesterday, as investors await the release of inflation data and the Budget announcement. The index ended 0.5pc higher to 7,476, hitting a three-week high after having recouped all of its year-to-date losses in the previous session. While a large presence of commodity and financial stocks has helped the FTSE 100 outperform its continental peers this year, investors worry that faster monetary policy tightening might stifle economic growth.
Asian equity markets gained Wednesday, with investors expanding their search for hedges after the Federal Reserve’s strengthened resolve to clamp down on inflation drove bonds toward record losses.
An MSCI Inc. gauge of Asia Pacific shares rose for a second day, led by Japan and Hong Kong. U.S. futures fluctuated after the S&P 500 advanced for the fifth session in six. The index has now recovered halfway from the rout that started in January. European contracts advanced.
Treasuries extended a slide triggered Monday by signals from Fed Chair Jerome Powell that a half-point interest-rate hike is possible at the central bank’s next meeting. Short-term U.S. government bonds sank toward their worst quarterly performance in almost four decades, and yields rose to highs unseen since mid-2019.
Oil advanced on the prospect of new sanctions on Russia over its invasion of Ukraine and as U.S. crude inventories declined. The yen sank to a six-year low, while a gauge of the dollar was steady.
Chinese equities wavered on more lockdowns to curb rising Covid-19 cases, but tech stocks extended a rally into a second day, as share buybacks by Xiaomi Corp. and Alibaba Group Holding Ltd. spurred hopes that other tech firms may follow suit.
Sterling pushed higher against the dollar and euro as investors turn their attention to new inflation data and Rishi Sunak’s Budget update to parliament. The pound rose 0.6pc against the dollar to $1.3258 – its highest in almost three weeks. Against the euro it hit a two-week high at 83.74p.
The currency is continuing to recover losses since the Bank of England’s cautious interest rate increase last week. It could be given a further boost if today’s inflation figures exceed expectations and fuel bets on further interest rate rises. Traders are also focused on the Spring Statement, with the Chancellor facing calls to ease the cost-of-living crisis for British households.
More Sanctions
President Joe Biden and allies are expected to announce new sanctions against Russia over its invasion of Ukraine and fresh measures designed to keep the Kremlin from sidestepping existing economic penalties, the White House said. The news came after China’s top Russia envoy urged Chinese business people in Moscow to seize economic opportunities created by the crisis — a strategy that could help soften the sanctions blow.
FTSE 100 live outlook prediction analysis for 23rd March 2022
After Monday’s consolidation the bulls managed to get a bit more upside yesterday and overnight we have just popped through the 7500 round number. The FTSE100 did lag the rise on the S&P and Dax though yesterday ahead of the Spring Statement in the UK today. We also have inflation figures out this morning which have just come in at 6.2% versus a forecast of 6%. The reality for most is that its actually higher than that though!
Initially we are at resistance at the 7520 level where we have R1 and the Hull MA on the 2h so I am thinking that we will get an initial dip down to the daily pivot from here at 7471. If that holds then it should tee up a bounce towards the 7555 daily resistance level which has come into play now, and just above R2 for today at 7546.
If the bears were to break below the pivot then 7444 is S1 and just below the 2h coral at 7460, though should it start to get bearish then a slide down to the 7410 200ema on the 30m chart would likely play out. However a long off this would be worth a go.
The FTSE100 daily chart moving averages have also gone bullish with this climb from the 6766 level and we have support at 7350 on that from them. If we were to dip down this low during the next few sessions then it will be crucial for the bulls to defend this level for further upside. So far the FTSE100 has followed the usual seasonality pattern of the weaker start to the year and then a bullish bias kicking in during the start of March. For the moment its still looking like buy the dips on the longer times frames is the right play.
The S&P bulls may well be pushing for the 4546 level today, just above the 4535 daily level and will be keen to defend any drops. The daily pivot is also support to start with on that, at 4494. Below that then 4465 is S1 and the key fib, and a fairly key level for the bulls to defend. If that is seen then a long here is worth a go.
The Dax40 could also do a dip and rise today with the pivot at 14428 also looking like initial support. 14350 below that has the 200ema on the 30m chart and could well hold for a bounce.
Don’t forget that we have the Spring Statement this afternoon around lunchtime. The Chancellor is expected to address the spiralling cost of living crisis with plans such as a cut to fuel duty to take the sting out of rising petrol prices on the table.
Good luck today.
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