Quote from Nick on 18th February 2022, 10:19 am

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

The FTSE 100 dropped sharply yesterday as the rising threat of war between Russia and Ukraine rattles global markets. The blue-chip index extended losses to slump 0.9pc as optimism about a diplomatic solution to the crisis began to fade.

US President Joe Biden warned a Russian invasion of its neighbour was possible within days, warning of a so-called false flag operation designed to spark war.

BP and Shell dragged the FTSE down, tracking lower oil prices amid volatile trading. Banking stocks including HSBC also declined.

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U.S. and European equity futures climbed Friday and havens such as gold and bonds dipped as planned talks between Russia and the U.S. over Ukraine alleviated some investor gloom about geopolitical risks.

The U.S. said Russian and American officials agreed to meet next week in Europe. S&P 500 and Nasdaq 100 contracts pushed higher and Asian shares pared losses, with China managing to deliver a smattering of gains.

That was a turnaround for still-vulnerable sentiment compared with Thursday, when U.S. equities sank -- lopping 3% off the tech-heavy Nasdaq 100 -- on ramped up Biden administration warnings of a possible Russian attack on Ukraine. Moscow again rejected the warnings as unfounded.

The prospect of a meeting coaxed investors out of safer investments, sending Treasury yields up and pulling bullion below $1,900 an ounce -- a level it only just scaled for the first time since June. The yen slid to the bottom of the Group-of-10 currency basket.

Crude oil slipped as traders balanced the potential return of Iranian barrels -- if the nation reaches a nuclear accord with world powers -- against the risk of disruption to Russian energy supplies.

Global stocks are set for a second week of losses, sapped by the standoff between Russia and the West over Ukraine as well as the prospect of tightening Federal Reserve monetary policy. Some $2.2 trillion of option expirations set to hit the market Friday may exacerbate volatility

Tensions Rise

The U.S. ramped up warnings of a possible Russian attack on Ukraine, with President Joe Biden saying the probability of an invasion is “very high.” Russian officials said no invasion of Ukraine was underway and none was planned. But the Kremlin said in an official response to the Biden administration’s proposed security assurances that the offers were unsatisfactory and Russia might have to resort to unspecified “military-technical measures.” Ukraine’s ambassador to the U.S. said Ukraine would not panic and that armed forces were on high alert.

FTSE 100 live outlook prediction analysis for 18th February 2022

A decent couple of days have played out so time to exercise a bit of caution as its Friday and we have OPEX today. Generally I am thinking that we will once again test the 7600 area today before a drop off later, as profits get banked as lots wont want to hold over the weekend once again. The S&P defended the 4375 level yesterday, likewise the FTSE100 defended the 7500 level yesterday evening. We have had a decent enough bounces from this 7500 level a few times this week and therefore its worth bearing in mind as decent support again. 7474 is also the daily support just below that though so an overshot too that should 7520 break may well play out.

For today we may well see an initial drop off from this 7555 level we are at as I write this, as we have dropped already a bit from the 200ema at 7567 overnight. We have 30m coral support to start with at 7520, and we may well see the bulls have a go here to build on the bounce from last night. A break of that then 7500 and then the 7474 levels are next up. Should we see this lower one then a long here is probably worth a go.

Should the bears break 7474 then 7450 is still showing as daily support. with the bottom of the 10 day Raff here. I am not sure we will get that low today (unless war suddenly kicks off!).

For the bulls then they will be looking to push past that overnight high at 7567 and target the 7600 level again. 7570 is also the red 2h coral though not the first test.

Above 7600 then 7646 is R2 and the next level of note, with the 10 day Raff channel above that 7667. Not sure we will see that today, but what is interesting is that the 10d Raff has turned down for the first time in a while. The bulls need to mount a stern defence and push past 7600 really to reverse the bearish overtones.

It's OPEX (option expiry) today so expect some volatility at 10:10 as the various futures contracts roll over.

Not too much more to say really. Its been a great week for the orders so just exercise a bit of caution today and I hope you don't suffer any damage from this storm that the media are loving! Have a great weekend and good luck today.

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