FTSE 100 prediction for trading, analysis for today 4th July 2023

FTSE 100 Prediction and analysis........  Asian shares firmed as demand for tech stocks buoyed Japan's market, while a data-packed week promises to be pivotal to the outlook for the Chinese economy and U.S. interest rates. China's factory activity slowed in June as the Caixin manufacturing survey showed a dip to 50.5, from 50.9 in May. That slightly beat market forecasts of 50.2, but still underlining the weakening trend seen in other surveys.

Euro Stoxx 50 contracts gained, while futures the S&P 500 were flat and those for the Nasdaq 100 edged up. The US tech index rose almost 2% last week and notched its best ever first-half of a year. The S&P 500 reached the highest since April 2022 and posted its best first half since 2019, with Apple Inc. hitting the $3 trillion milestone along the way.

FTSE 100 prediction for trading

After the bullish Friday we now have the 4th July US holiday period, and ISM manufacturing data at 15:00 as well - forecast is 47 versus 46.9 previously.

For today I am thinking that we will have an initial drop down from the 7566 area where we are pre market, and test the daily pivot at 7523 fairly swiftly. That may then galvanise the bulls for a bit of a bull Monday over the rest of the day and a rise towards the 7600 round number. We have daily resistance at the 7587 level with the top of the 10d Raff channel here so the bulls may hit the buffers in this area.

Above this though then a test of the round number would probably play out, with the bulls attempts to push higher possibly getting 7620 and the top of the 20d Raff channel. I can't see much more than that today though the next area of note is the daily coral at the 7640 level, along with R3 there.

Support wise, the daily pivot looks fairly key to start with and 7520 is also the Hull MA on the 2h chart. We sort of held this on Friday at 7480 already, and another cleaner test should likely hold.

Below 7520 though and the bears will be trying for that 7472 key fib, and also just below Friday low., though we do have the 30m 200ema at 7507, and the S1 level at 7495. If it goes really bearish today then 7406 is the next daily support level of note.

The mainstream news is more pessimistic once again, and may galvanise the markets into rising as it's usually the inverse case. Rate rises are filtering though into the property market more now as well and may also start to temper general spending more. Which in turn should lower inflation as demand reduces. Crudely speaking!

Good luck today.

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