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Ahead of US CPI can the bulls defend the 7700 level | 7672 support below | 7753 7788 resistance

#1 · 11th January 2023, 9:58 am

Quote from Nick on 11th January 2023, 9:58 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 11th January 2023
Equities climbed in Asia on Wednesday amid upbeat sentiment over China’s economic reopening and as traders bet that the US consumer price index will show further softening. Shares advanced about 1% in Hong Kong, Japan and Australia after the S&P 500 moved back above its key 3,900 mark. US futures fluctuated and contracts for European shares rose.
A second global recession looms this decade, the World Bank has warned as it slashed its growth forecasts for almost all advanced economies this year and next. World Bank President David Malpass said Russia's war in Ukraine, stubbornly high inflation and global interest rate rises threatened to add to the "already devastating" legacy of Covid and resulting global lockdowns. The institution downgraded its forecasts for global growth to 1.7pc in 2023 and 2.7pc in 2024, from previous projections of 3pc in both years.
While Federal Reserve Chair Jerome Powell did not give any policy clues in a panel discussion in Stockholm overnight, Fed Governor Michelle Bowman said the central bank would have to raise interest rates further to combat high inflation.
Been a bit of a funny week so far but as a positive for the bulls the S&P500 is back above the 3900 level. As such they will be keen to pull away from that and with yesterday's rise, the 2h chart has gone bullish with 3905 currently showing as support. With the green 30m coral and the daily pivot also here then I would like to see that hold for a bounce up towards the 3950 level.
That should then follow through onto the FTSE100, which may well see a dip and rise play out this morning, as it's currently sat on the 7720 resistance level once again. The bulls will be keen to defend the 7700 level as we have the daily pivot here and also just below the 30m coral (now green).
That said the bulls might not have it all their own way as the 2h chart remains bearish, with the 7745 level as resistance. That also ties in with the 7750 daily resistance level so a rise to here may well then see some selling.
Below the 7700 level the bears will be looking to take this down to the 7670 level where we have the 200ema 30min, with the key fib just below this at 7654. S2 is also at 7648 so the bulls will definitely be looking to defend this area if it gets that low. The Raff channels continue to head up for the FTSE100, though we aren't currently near the edges so I don't expect the extremes to be tested today.
Back to the bulls, and above the 7750 level then 7788 is R3 and the next key area. That said, I think we may struggle to push through 7750 today if it gets there, as we are also awaiting the next CPI report on Thursday in the USA. The report is expected to show December’s headline inflation at 6.5% versus 7.1% in November. Indications from the December U.S. jobs report released last week that wage inflation is slowing has provided some reassurance that inflation is past its peak, thus potentially giving the Fed leeway to slow its interest rate hikes.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 11th January 2023

Equities climbed in Asia on Wednesday amid upbeat sentiment over China’s economic reopening and as traders bet that the US consumer price index will show further softening. Shares advanced about 1% in Hong Kong, Japan and Australia after the S&P 500 moved back above its key 3,900 mark. US futures fluctuated and contracts for European shares rose.

A second global recession looms this decade, the World Bank has warned as it slashed its growth forecasts for almost all advanced economies this year and next. World Bank President David Malpass said Russia's war in Ukraine, stubbornly high inflation and global interest rate rises threatened to add to the "already devastating" legacy of Covid and resulting global lockdowns. The institution downgraded its forecasts for global growth to 1.7pc in 2023 and 2.7pc in 2024, from previous projections of 3pc in both years.

While Federal Reserve Chair Jerome Powell did not give any policy clues in a panel discussion in Stockholm overnight, Fed Governor Michelle Bowman said the central bank would have to raise interest rates further to combat high inflation.

Been a bit of a funny week so far but as a positive for the bulls the S&P500 is back above the 3900 level. As such they will be keen to pull away from that and with yesterday's rise, the 2h chart has gone bullish with 3905 currently showing as support. With the green 30m coral and the daily pivot also here then I would like to see that hold for a bounce up towards the 3950 level.

That should then follow through onto the FTSE100, which may well see a dip and rise play out this morning, as it's currently sat on the 7720 resistance level once again. The bulls will be keen to defend the 7700 level as we have the daily pivot here and also just below the 30m coral (now green).

That said the bulls might not have it all their own way as the 2h chart remains bearish, with the 7745 level as resistance. That also ties in with the 7750 daily resistance level so a rise to here may well then see some selling.

Below the 7700 level the bears will be looking to take this down to the 7670 level where we have the 200ema 30min, with the key fib just below this at 7654. S2 is also at 7648 so the bulls will definitely be looking to defend this area if it gets that low. The Raff channels continue to head up for the FTSE100, though we aren't currently near the edges so I don't expect the extremes to be tested today.

Back to the bulls, and above the 7750 level then 7788 is R3 and the next key area. That said, I think we may struggle to push through 7750 today if it gets there, as we are also awaiting the next CPI report on Thursday in the USA. The report is expected to show December’s headline inflation at 6.5% versus 7.1% in November. Indications from the December U.S. jobs report released last week that wage inflation is slowing has provided some reassurance that inflation is past its peak, thus potentially giving the Fed leeway to slow its interest rate hikes.

Recommended Broker

IC Markets - offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership and Live Trading

If you would like more detailed analysis for FTSE100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

Daily Analysis pre market open (sent around 7am each day) for FTSE100, DAX40, Gold and S&P500.
Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
Telegram live trading room and webinar group membership for discussion and realtime trade updates