FTSE 100 Analysis | Trading Signals | Forecast | Prediction | FTSE 100 Outlook
The FTSE 100 closed lower as inflation worries continue to rattle investors. It fell 0.2pc to 7,130 points, ending its three-day streak of gains. The domestically-focused FTSE 250 closed marginally lower.
The UK is vulnerable to an inflation shock that could stifle its economic rebound, the International Monetary Fund has warned. Britain and the US and some emerging markets face a risk of surprisingly strong and sustained price growth, the global lender of last resort said.
Central bankers need to be ready with higher rates if inflation jumps too much, the IMF said, even if it means delaying a labour market recovery.
The group cut its forecast for global growth this year by 0.1pc to 5.9pc as part of its latest World Economic Outlook (WEO), warning the momentum of the post-pandemic recovery had “weakened”. It predicted the UK economy will grow 6.8pc this year, down 0.2 percentage points from its July forecast, but 0.2 percentage points more quickly next year at 5pc.
Asian stocks were mixed Wednesday as traders weighed the impact of elevated inflation on the economic recovery and looked ahead to earnings reports. A gauge of the dollar ticked lower. Shares in Japan posted modest losses, while South Korea outperformed amid a strong jobs report. S&P 500 and Nasdaq 100 futures dipped as investors wait to see whether the corporate profit outlook will boost sentiment. Apple Inc. slipped on a likely cut in iPhone 13 production targets for 2021 due to chip shortages, putting the focus on pandemic-related supply-chain snarls.
The U.S. 10-year Treasury yield held below 1.60%. Markets are bracing for a U.S. CPI report that is expected to show elevated inflation. A rally in oil paused but crude remained around $80 a barrel amid a global energy crunch. Chinese thermal coal futures hit another record high.
FTSE 100 live outlook prediction analysis for 13th October 2021
Once again the 7145 level was resistance yesterday so that is the line in the sand that the bulls will need to break to enable a push towards the 7200 level. The FTSE100 is holding up pretty well still, despite the S&P500 treading water around the 4350 area.
Talking of the S&P the bulls will need to defend the 4315 level today where we have the key fib support and just below S1, while the bears will need to defend a break higher at 4385 where we have the 2h resistance levels. That looks to be the range in play at the moment.
Back to the FTSE100 and initial resistance above the 7145 level is at 7165 where we have the R1 and key fib level. Above that then the bulls will be looking to push towards 7200 and with R2 here, we could see a ceiling form here for today. The daily chart remains bullish, as does the 2h chart so there is scope for continued upside. We are nearing the end of the seasonal weakness period (September and early to mid October) so we could well start to see the bulls reappear in earnest. UK stocks remain good value at the moment.
Above 7200 then 7250 is the top of the Raff 10day (and in fact both Raff channels are still heading up) would be the next key level. Not expecting us to get that high today, and a break of 7200 would probably need the US markets to get bullish too.
For the bears, they will be looking to break below the 7100 level. We have the green 2h coral at 7103, the daily pivot at 7111 and the 200ema at 7099 – this latter support line held yesterday and the double bottom at 7060. If the bulls can spring it back up off 7100 then it keeps them in play, otherwise the bears are going to try and take it down to 7070 again as we have S1 and the key fib here once again. Below that the 7022 level with S2 is next up, and 7018 daily support.
So, looking at 7100 and 7070 again as support with 7020 below that. 7165 and 7199 as the main resistance levels to watch for today. Good luck!
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