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Asian markets drop | 7890 7860 support | 7920 7966 resistance | Hawkish Powell hurts sentiment

#1 · 8th March 2023, 11:04 am

Quote from Nick on 8th March 2023, 11:04 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 8th March 2023
Check out IG for trading https://refer.ig.com/iA6I8q
Asian shares fell sharply on Wednesday, while the dollar advanced after hawkish comments from Federal Reserve Chair Jerome Powell raised the possibility of the U.S. central bank returning to large rate hikes to tackle sticky inflation.
The Fed will likely need to raise interest rates more than previously expected in response to recent strong data, Powell said on the first day of his semi-annual, two-day monetary policy testimony before Congress. The hawkish comments from Powell sent U.S. stocks sharply lower, with the risk-off mood continuing in Asian trade.
We got the dip rise dip play out well yesterday and we may well see the slide continue into today, after a weak Asian session. For the FTSE100 we have initial resistance at the 7916 level with the daily pivot here, along with the 30m coral and the 30m 200ema, so I would expect to see any early rise falter here. That could then be the catalyst for a drop down to finally test the 7860 daily support level, and with the key fib here, a possible bounce point for today.
Above the 7916 level then the bulls would be looking towards the 7966 key fib, but we have a now bearish 2h chart with the red coral at 7935, along with the Hull MA here too. As such the bulls have got a bit of an uphill task on their hands to really drive it higher today, and with NFP on Friday and more talk of further rate rises from the Fed, they really are on the back foot. The 8050 level slips further away again....
For the bears, they are looking to break that 7860 level as that would open up a test of the lower daily support at 7800, and with S3 here, along with a strong bearish momentum, they will probably see it today or tomorrow. If the bulls cannot make this stick above 7900 today then it's definitely on the cards.
7842 is S2 though so splitting these support zones, though if 7860 breaks it will probably drop through this area as well.
7860 would also be a test of the 10d Raff channel bottom, a channel that has been holding pretty well recently, so that also lends some weight to this area.
On the news front today we have Eurozone GDP at 10am, and then Powell at 3pm, both of which may well trigger a bit of volatility.
For the S&P500 I am looking at the 4010 area as strong resistance and the bearish momentum to continue on that for a bit longer. Higher up the now bearish 2h chart has resistance at the 4038 level though I am not sure they can add 60 points this morning from where it currently is! The 20d Raff channel is now also heading down and has 4060 as resistance.
So, feels like a short the rallies day again as per yesterday. Good luck today!
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 8th March 2023

Check out IG for trading https://refer.ig.com/iA6I8q

Asian shares fell sharply on Wednesday, while the dollar advanced after hawkish comments from Federal Reserve Chair Jerome Powell raised the possibility of the U.S. central bank returning to large rate hikes to tackle sticky inflation.

The Fed will likely need to raise interest rates more than previously expected in response to recent strong data, Powell said on the first day of his semi-annual, two-day monetary policy testimony before Congress. The hawkish comments from Powell sent U.S. stocks sharply lower, with the risk-off mood continuing in Asian trade.

We got the dip rise dip play out well yesterday and we may well see the slide continue into today, after a weak Asian session. For the FTSE100 we have initial resistance at the 7916 level with the daily pivot here, along with the 30m coral and the 30m 200ema, so I would expect to see any early rise falter here. That could then be the catalyst for a drop down to finally test the 7860 daily support level, and with the key fib here, a possible bounce point for today.

Above the 7916 level then the bulls would be looking towards the 7966 key fib, but we have a now bearish 2h chart with the red coral at 7935, along with the Hull MA here too. As such the bulls have got a bit of an uphill task on their hands to really drive it higher today, and with NFP on Friday and more talk of further rate rises from the Fed, they really are on the back foot. The 8050 level slips further away again....

For the bears, they are looking to break that 7860 level as that would open up a test of the lower daily support at 7800, and with S3 here, along with a strong bearish momentum, they will probably see it today or tomorrow. If the bulls cannot make this stick above 7900 today then it's definitely on the cards.

7842 is S2 though so splitting these support zones, though if 7860 breaks it will probably drop through this area as well.

7860 would also be a test of the 10d Raff channel bottom, a channel that has been holding pretty well recently, so that also lends some weight to this area.

On the news front today we have Eurozone GDP at 10am, and then Powell at 3pm, both of which may well trigger a bit of volatility.

For the S&P500 I am looking at the 4010 area as strong resistance and the bearish momentum to continue on that for a bit longer. Higher up the now bearish 2h chart has resistance at the 4038 level though I am not sure they can add 60 points this morning from where it currently is! The 20d Raff channel is now also heading down and has 4060 as resistance.

So, feels like a short the rallies day again as per yesterday. Good luck today!

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