Quote from Nick on 21st February 2022, 9:28 am

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

The FTSE 100 fell Friday as weakness in healthcare stocks and simmering Russia-Ukraine tensions offset optimism around better-than-expected January retail sales data. The blue-chip index recorded its biggest weekly drop in three months, closing 0.3pc lower at 7,513.

Today, U.S. equity futures rose and Asian stocks pared losses Monday as traders evaluated the possibility of a summit on Ukraine between President Joe Biden and his Russian counterpart Vladimir Putin.

Nasdaq 100, S&P 500 and European contracts erased falls and turned higher, while an Asia-Pacific equity index came off its lows but stayed in the red. Markets are being whipsawed by Russia’s troop buildup near Ukraine and efforts at diplomacy to bring both sides back from the brink of war.

France said its proposal for a diplomatic meeting was accepted in principle by Biden and Putin. U.S. officials said a summit would occur only if Russia doesn’t invade Ukraine. There was no immediate confirmation from Moscow, which has repeatedly denied that it plans to invade.

Demand for havens eased a little, taking gold below $1,900 an ounce. Treasury futures slipped -- cash Treasuries won’t trade because of a U.S. holiday. Bond yields in Australia and New Zealand stayed lower in a sign of investor caution.

The dollar dipped and Russia’s ruble rose as much as 1.1% in offshore trading. Oil fluctuated and nickel jumped in part as investors assess what might happen to commodity prices if the Ukraine situation worsens.

Earlier, the U.S. told allies that a Russian invasion of Ukraine could target multiple cities beyond the capital, Kyiv. Biden said on Friday he’s convinced Putin has decided to move against Ukraine. U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov are due to meet Thursday.
The Ukraine standoff, along with the worry that tightening Federal Reserve monetary policy could choke growth in the world’s biggest economy, raise the likelihood of more swings in markets in an already volatile year.

Fed Policy

Key Federal Reserve officials at the end of last week backed raising interest rates in March to curb the hottest inflation in 40 years.

The remarks on Friday by Governor Lael Brainard and New York Fed President John Williams, as well as Chicago Fed chief Charles Evans, showed officials eager to get tightening under way, without seeking a supersized interest-rate hike or a move before the next scheduled meeting.

Bets on an aggressive, 50 basis-points Fed liftoff next month have diminished. The Fed’s key inflation metric may have accelerated to a fresh four-decade high in January, data this week is expected to show.

FTSE 100 live outlook prediction analysis for 21st February 2022

We got a good drop off the 7570 daily resistance level on Friday and in fact overnight dropped all the way to the 7474 daily support, and that has seen a decent hold so far. News flow is still mixed at the moment with regards to Ukraine though a glimmer of war aversion with the summit agreed earlier. That may well see the FTSE100 rise back to retest the 7570 levels and also more likely the 7603 daily level above that.

The first hurdle is the R1 and 200ema level at 7555 so the bulls will be keen to push through this early on, to get 7570. 7555 is also the red 2h coral though not the first test so not usually as strong. Above the 7603 level then the 7632 level is R3, and 7643 is the top of the 10d Raff - will we see that tested today?!

For the bears (though I think that we will more than likely see a bull Monday, despite the US markets being closed for Presidents Day) they will need to break the support level at 7522 where we have the daily pivot and the 30m coral.

If they manage that then the 7474 is in play again, with 7450 below that, but as mentioned I am not expecting us to get that low today. The S&P buying algo's may well kick in as well.

Gold has also dropped off from the 1905 level, failing to hold above 1900 again so far, and looks like it may slide as low at 1880 today. Short the rallies for the moment on gold.

The 2h S&P chart does remain bearish though with decent looking resistance at the 4399 level for today. As such, should we see this level then a short here is probably worth a go, though we may well se the 4364 level defended if the overall backdrop today is a bit more upbeat. 4403 for R1 just above that resistance too so will be interesting to see the reaction here.

Stay nimble today as probably be as choppy a UK coastal resort this weekend! Watch for the 7555, 7570 and 7603 resistance levels, 7522, 7474, 7450 support areas. Good luck today!

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