Dip and rise today with NFP with 6560 support | 6670 6715 resistance

Dip and rise today with NFP with 6560 support | 6670 6715 resistance

FTSE 100 live outlook prediction analysis for 5th March 2021

US stocks slumped yesterday, having opened higher, with the S&P 500 dropping towards the lowest in almost five weeks.  It comes as Fed chairman Jerome Powell refrained from pushing back more forcefully against the recent spike in treasury yields.

He said the surge caught his attention and that disorderly market moves would be unwelcome, but added that the central bank is still a “long way” from achieving its goals as he sees a “lot of ground to cover before tightening”.

London-listed stocks had a poor session overall, with the FTSE 250 dropping having closed near a one-year high in the wake of Wednesday’s Budget, and the FTSE 100 dipping amid concerns over a global rebound in inflation.

Dovish Powell
Federal Reserve Chair Jerome Powell sounded a gentle word of caution to the bond market on Thursday that he’s watching the jump higher in long-term interest rates, but stopped well short of trying to rein them in. Ten-year Treasuries extended losses and U.S. stocks sold off after he spoke, and futures in Asia were in the red. Bond yields have climbed in recent weeks; trading has been turbulent at times and higher yields have also unsettled the stock market. Powell reassured markets that the Fed was nowhere close to pulling back on its massive support for the economy. “We will be patient,” he said. “We’re still a long way from our goals.”

Eyes on Oil
Saudi Arabia and its OPEC+ allies shocked the oil market with a decision to keep supply in check, sending prices surging and adding inflationary pressure to the global economy as it emerges from the pandemic. One year on from the outbreak of a bitter price war that sent crude below zero, the kingdom showed that its priority is preserving the hard-won oil recovery rather than worrying about tightening the market too much. Meanwhile China’s fuel demand is going from strength to strength, leaving the capital blanketed in smog despite concerns a virus resurgence prior to Lunar New Year would derail the robust rebound.[Bloomberg]


US & Asia Overnight from Bloomberg

Asian stocks and U.S. futures pared losses Friday as investors digested comments from Federal Reserve Chairman Jerome Powell that fell well short of trying to rein in bond yields. Treasuries held a decline.

Stock markets were in the red in South Korea and China, which set a conservative growth target of more than 6% for 2021 that signals more restrained monetary and fiscal policies this year. Japanese equities edged higher. On Thursday, the tech-heavy Nasdaq 100 extended its decline to almost 10% from February’s peak, and the S&P 500 erased nearly all its 2021 gains.

Australian bond yields surged in early trade, tracking a selloff in the U.S. 10-year that lifted the yield curve to its steepest point since 2015. Japan’s benchmark yield dropped as the central bank governor quashed speculation that the trading band for the 10-year might be widened. The U.S. dollar strengthened against nearly all major peers.

Oil prices leapt after the OPEC+ alliance surprised traders with its decision to keep output unchanged. Bitcoin fell with other risk assets.

Powell noted the recent runup in yields without hinting at intervention, saying that he would be “concerned by disorderly conditions.” While some investors view the rates moves as a sign of economic strength, others are growing concerned about rising inflation and the impact of higher yields on elevated stock valuations.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

We had a really great day yesterday (in fact this week has been a good one) so going to be a bit more cautious today, as its Friday but also as we have NFP and US unemployment data later. Talking of which, the forecast for NFP is 182k versus 49k previous, unemployment rate 6.3% forecast and no change. That’s released at 13:30 so watch for some swings on that news.

Overnight the FTSE100 futures have dipped below that 6565 support level that we had pencilled in, (and held the first test) and test the 6550 level, which have seen another bounce and the bulls are trying to hold above the 6600 level as I write this. The FTSE held up pretty well yesterday as the US sold off heavily in a good sign for the drop to be short lived. Or will it?! The US bulls need to get the price back above the pivot at 3775 initially for a bit of bull today.

The daily FTSE chart is flirting with a bit of a bearish cross on the EMAs but not confirmed as yet. They are certainly going to try and defend the dips today I am feeling so wouldn’t be surprised to see a bit of a rise across the board today. The 2h chart remains bearish for the moment too.

If we get any initial dip on the FTSE then the first key support is once again that 6565 level, with S1 at 6549 below that. If it were to get really bearish then it would most likely slide down to S2 at 6504.

For the bulls, they will be looking for an early break above the 200ema at 6615 as that should then set up a rise towards the key fib at 6638, R1 at 6654 and ultimately for today I am thinking the 6670 area again. That would be a decent double top with yesterday then, and we may well see a bit of profit taking here ahead of the weekend.

The US bulls may well do the usual Friday ramp today as well later on.

So generally looking at buying the dip today and the bulls will need to be quick out the blocks. If we get an initial dip then it looks to be worth buying.

Have a great weekend and good luck today – be careful on NFP Fridays!

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