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Bear Tuesday beckons with 7570 7546 7524 support | 7605 7620 7645 resistance

#1 · 20th June 2023, 9:20 am

Quote from Nick on 20th June 2023, 9:20 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 analysis & prediction for 20th June 2023
Stocks in Asia fell on Tuesday as investors worried China’s latest rate cut was not enough to boost confidence in the weakening economy and awaited a wider stimulus package by Beijing.
China, in a highly anticipated move, cut two key benchmark lending rates for the first time in 10 months on Tuesday, with its one-year loan prime rate (LPR) lowered by 10 basis points to 3.55% and the five-year LPR cut by the same margin to 4.20%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.69%. China’s benchmark CSI edged down 0.03%. U.S. markets were closed on Monday.
The rate cuts are the latest in a string of moves by Beijing to shore up a slowing recovery in the world’s second-largest economy amid looming deflation risks, property market woes and high youth unemployment. The People’s Bank of China lowered the medium-term lending facility rate on Thursday last week. The market was speculating on what China could do next to revive the recovery but was disappointed by a lack of concrete measures from a cabinet meeting on Friday.
FTSE100 analysis
The FTSE100 continues to moves away from the 7690 resistance level that we nearly tested on Friday and with the US closed yesterday we spent the day drifting down, and are nearly at the next major daily support at 7770. The 2h chart has gone bearish as you would expect and now has decent resistance locked in at the 7620 level, so should we see a rise to this area today then I would like to see a drop off from there.
Below 7570 then the bears will be aiming for the key fib at 7546 which is also just below the 7552 S2 level for today. A rise and dip would make sense today though, just to test the 2h resistance levels at the 7620 before more downside.
Traditionally, and looking at the seasonality chart, the back end of June is weaker before more upside in July. Worth bearing in mind and you can see the chart here
If the bears were to break 7546 today then 7524 is S3 and they will more than likely also try to aim for the round number at 7500. That said, let's see what 7570 does.
Resistance wise, 7598 is first up where we have the daily pivot and then 7606 for a test of the 30m 200ema. 7615 is R1 and then the 2h levels at 7620 as mentioned.
Should they break 7620 then ultimately I am looking for a retest of the recent high from Friday at 7689, and that daily resistance level.
Not much on the news front, mainly it's waiting for the UK inflation figures tomorrow, and then we also have Powell at 15:00 tomorrow. 22nd June sees the BoE interest rate decision and another likely rise of 0.25%. Does feel like spending is slowing down though and retail and leisure is dropping off a bit. That should also feed through into a decline in inflation.
Anyway, not too much more to say, keep an eye on those key levels and lets see if we get an initial bounce off the 7570 area to start with.
Good luck today.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 analysis & prediction for 20th June 2023

Stocks in Asia fell on Tuesday as investors worried China’s latest rate cut was not enough to boost confidence in the weakening economy and awaited a wider stimulus package by Beijing.

China, in a highly anticipated move, cut two key benchmark lending rates for the first time in 10 months on Tuesday, with its one-year loan prime rate (LPR) lowered by 10 basis points to 3.55% and the five-year LPR cut by the same margin to 4.20%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.69%. China’s benchmark CSI edged down 0.03%. U.S. markets were closed on Monday.

The rate cuts are the latest in a string of moves by Beijing to shore up a slowing recovery in the world’s second-largest economy amid looming deflation risks, property market woes and high youth unemployment. The People’s Bank of China lowered the medium-term lending facility rate on Thursday last week. The market was speculating on what China could do next to revive the recovery but was disappointed by a lack of concrete measures from a cabinet meeting on Friday.

FTSE100 analysis

The FTSE100 continues to moves away from the 7690 resistance level that we nearly tested on Friday and with the US closed yesterday we spent the day drifting down, and are nearly at the next major daily support at 7770. The 2h chart has gone bearish as you would expect and now has decent resistance locked in at the 7620 level, so should we see a rise to this area today then I would like to see a drop off from there.

Below 7570 then the bears will be aiming for the key fib at 7546 which is also just below the 7552 S2 level for today. A rise and dip would make sense today though, just to test the 2h resistance levels at the 7620 before more downside.

Traditionally, and looking at the seasonality chart, the back end of June is weaker before more upside in July. Worth bearing in mind and you can see the chart here

If the bears were to break 7546 today then 7524 is S3 and they will more than likely also try to aim for the round number at 7500. That said, let's see what 7570 does.

Resistance wise, 7598 is first up where we have the daily pivot and then 7606 for a test of the 30m 200ema. 7615 is R1 and then the 2h levels at 7620 as mentioned.

Should they break 7620 then ultimately I am looking for a retest of the recent high from Friday at 7689, and that daily resistance level.

Not much on the news front, mainly it's waiting for the UK inflation figures tomorrow, and then we also have Powell at 15:00 tomorrow. 22nd June sees the BoE interest rate decision and another likely rise of 0.25%. Does feel like spending is slowing down though and retail and leisure is dropping off a bit. That should also feed through into a decline in inflation.

Anyway, not too much more to say, keep an eye on those key levels and lets see if we get an initial bounce off the 7570 area to start with.

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