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Bears gaining the upper hand as sterling climbs | 6565 6539 6500 support | 6642 6690 resistance

#1 · 22nd February 2021, 10:27 am

Quote from Nick on 22nd February 2021, 10:27 am
FTSE 100 live outlook prediction analysis for 22nd February 2021
Sterling broke through the $1.40 barrier for the first time since April 2018 on Friday, and held steady, amid optimism surrounding the UK’s vaccine rollout. It was up 0.34pc against the US dollar at $1.402 as London’s markets closed. It also rose 0.36pc against the euro at €1.214. It marks its sixth consecutive week of gains, shrugging off a lockdown-induced slump in retail sales in January and propelled by a vaccination rollout that has boosted hopes of an impending economic recovery.

A rise in the currency didn’t sway London stocks from positive territory. The FTSE 100 benchmark added a slight 6.87 points to 6,624.02, while the FTSE 250 rose 102.09 points to 21,035.96. Signs of economic recovery, however, and a gain in Treasury yields have made gold less alluring, with investors shifting focus to industrial metals such as copper.
Gold slumped to $1,783 per ounce on Friday, down more than 6pc this year with signs it could fall further following the giddy heights of 2020. It hit a record high of $2,075 an ounce in August as investors sought safe havens. Predictions said it could go as high as $2,300. But it is the worst performer this year on Bloomberg’s commodity index and has had the poorest start to the year since 1991. As gold sank, copper jumped to its highest level in more than nine years, climbing 2.5pc on the London Metal Exchange to $8,763 a ton. Used in construction as well as power cabling and electric vehicle batteries, demand is expected to soar. It comes also as China, reported Bloomberg, may ban the export of rare-earth refining technology to countries or companies it considers a threat. According to the Financial Times, Beijing is considering limiting the export of about 17 minerals.
Stopping the Spread
The Pfizer and BioNTech Covid-19 vaccine appeared to stop the vast majority of recipients in Israel becoming infected, providing the first real-world indication that the immunization will curb transmission of the coronavirus. The vaccine, which was rolled out in a national immunization program that began Dec. 20, was 89.4% effective at preventing laboratory-confirmed infections, according to a copy of a draft publication that was posted on Twitter and confirmed by a person familiar with the work.[Bloomberg]
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US & Asia Overnight from Bloomberg
The bond selloff continued Monday as Treasury yields climbed and sovereign debt in Australia and New Zealand slid on concerns about faster inflation, tempering stock market optimism from positive vaccine news.
Benchmark 10-year Treasury yields climbed to the highest in about a year. A gauge of Asian stocks edged lower, erasing earlier gains amid a surge in metals that could fan price pressures. Japanese shares outperformed while other key markets lagged. S&P 500 and European futures dipped after the U.S. index slipped Friday.
Copper hit the highest in more than nine years in a sign of optimism about the global recovery. Crude oil climbed to $60 a barrel as the market assessed the fallout from the big freeze across Texas. Bitcoin notched another record over the weekend, spurring a rally in the shares of Asian cryptocurrency stocks.
Sovereign bonds have slid on expectations vaccines and more fiscal stimulus will spur a global economic rebound and fan inflation. In Israel, the Pfizer Inc. and BioNTech SE Covid-19 shot appeared to stop the vast majority of recipients from infection. Progress against the disease has aided stock and commodity markets this year, but investors are also asking whether the reflation trade will drive up yields to a point that eventually hurts risk appetite.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Initially the FTSE 100 is sat on support at 6590 as I write this and as such we may well see an initial kick up towards the 6640 area again where we once again have strong resistance. With the R1 level, fib level, and also 200ema on the 30m chart here we may well see the bears try again here, and of course it also coincides with the high on Friday that we dropped off from.
The 2 hour chart remains bearish for the time being with 6658 Hull moving average resistance (and steadily falling) along with the red coral at 6707 currently.
Gold has started a move up as well and could well be back above 1800 before too long - the bulls will need to break that level though as we have the top of the 10 day Raff here.
On the S&P500 we have initial support at the 3880 level where we have the bottom of the 10 day Raff and also just below S1 at 3886 - the bulls will certainly be keen to defend this level as a break of this may well see a slide down towards the bottom of the 20d Raff at 3845 and linking in with S3 for today. We dropped off the first test of the red coral on the 2h at 3930 on Friday and the bears will be keen to make this stick - 3917 is now Hull moving average resistance on the 2h chart. Bulls need to break above 3920 today.
Back to the FTSE100 and above the 6642 resistance level 6680 is r2 and also just below the daily support level of 6688. Also with the red 2h coral line falling steadily, if we do get a slow rise to this area then we could see the bears appear here, if they fail at the 6640 level. Keep an eye on this 6690 level for a reaction as well though.
For the bears, below the 6590 initial support level then 6562 is the next level of note where we have the key fib level, and bottom of the 10d Raff. Below this then the bears will start to gain the upper hand and S3 at 6500 is next up. Not sure that we will slide that far today though (Bull Monday possibly, at least initially, today I am thinking) and a rise and dip may well play out better today.
So a few key levels to keep an eye on, possible move up in gold happening that could be front running a small dip in equities for the rest of February. Good luck today.
Recommended Broker

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If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
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FTSE 100 live outlook prediction analysis for 22nd February 2021

Sterling broke through the $1.40 barrier for the first time since April 2018 on Friday, and held steady, amid optimism surrounding the UK’s vaccine rollout. It was up 0.34pc against the US dollar at $1.402 as London’s markets closed. It also rose 0.36pc against the euro at €1.214. It marks its sixth consecutive week of gains, shrugging off a lockdown-induced slump in retail sales in January and propelled by a vaccination rollout that has boosted hopes of an impending economic recovery.

A rise in the currency didn’t sway London stocks from positive territory. The FTSE 100 benchmark added a slight 6.87 points to 6,624.02, while the FTSE 250 rose 102.09 points to 21,035.96. Signs of economic recovery, however, and a gain in Treasury yields have made gold less alluring, with investors shifting focus to industrial metals such as copper.

Gold slumped to $1,783 per ounce on Friday, down more than 6pc this year with signs it could fall further following the giddy heights of 2020. It hit a record high of $2,075 an ounce in August as investors sought safe havens. Predictions said it could go as high as $2,300. But it is the worst performer this year on Bloomberg’s commodity index and has had the poorest start to the year since 1991. As gold sank, copper jumped to its highest level in more than nine years, climbing 2.5pc on the London Metal Exchange to $8,763 a ton. Used in construction as well as power cabling and electric vehicle batteries, demand is expected to soar. It comes also as China, reported Bloomberg, may ban the export of rare-earth refining technology to countries or companies it considers a threat. According to the Financial Times, Beijing is considering limiting the export of about 17 minerals.

Stopping the Spread

The Pfizer and BioNTech Covid-19 vaccine appeared to stop the vast majority of recipients in Israel becoming infected, providing the first real-world indication that the immunization will curb transmission of the coronavirus. The vaccine, which was rolled out in a national immunization program that began Dec. 20, was 89.4% effective at preventing laboratory-confirmed infections, according to a copy of a draft publication that was posted on Twitter and confirmed by a person familiar with the work.[Bloomberg]

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US & Asia Overnight from Bloomberg

The bond selloff continued Monday as Treasury yields climbed and sovereign debt in Australia and New Zealand slid on concerns about faster inflation, tempering stock market optimism from positive vaccine news.

Benchmark 10-year Treasury yields climbed to the highest in about a year. A gauge of Asian stocks edged lower, erasing earlier gains amid a surge in metals that could fan price pressures. Japanese shares outperformed while other key markets lagged. S&P 500 and European futures dipped after the U.S. index slipped Friday.

Copper hit the highest in more than nine years in a sign of optimism about the global recovery. Crude oil climbed to $60 a barrel as the market assessed the fallout from the big freeze across Texas. Bitcoin notched another record over the weekend, spurring a rally in the shares of Asian cryptocurrency stocks.

Sovereign bonds have slid on expectations vaccines and more fiscal stimulus will spur a global economic rebound and fan inflation. In Israel, the Pfizer Inc. and BioNTech SE Covid-19 shot appeared to stop the vast majority of recipients from infection. Progress against the disease has aided stock and commodity markets this year, but investors are also asking whether the reflation trade will drive up yields to a point that eventually hurts risk appetite.

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

Initially the FTSE 100 is sat on support at 6590 as I write this and as such we may well see an initial kick up towards the 6640 area again where we once again have strong resistance. With the R1 level, fib level, and also 200ema on the 30m chart here we may well see the bears try again here, and of course it also coincides with the high on Friday that we dropped off from.

The 2 hour chart remains bearish for the time being with 6658 Hull moving average resistance (and steadily falling) along with the red coral at 6707 currently.

Gold has started a move up as well and could well be back above 1800 before too long - the bulls will need to break that level though as we have the top of the 10 day Raff here.

On the S&P500 we have initial support at the 3880 level where we have the bottom of the 10 day Raff and also just below S1 at 3886 - the bulls will certainly be keen to defend this level as a break of this may well see a slide down towards the bottom of the 20d Raff at 3845 and linking in with S3 for today. We dropped off the first test of the red coral on the 2h at 3930 on Friday and the bears will be keen to make this stick - 3917 is now Hull moving average resistance on the 2h chart. Bulls need to break above 3920 today.

Back to the FTSE100 and above the 6642 resistance level 6680 is r2 and also just below the daily support level of 6688. Also with the red 2h coral line falling steadily, if we do get a slow rise to this area then we could see the bears appear here, if they fail at the 6640 level. Keep an eye on this 6690 level for a reaction as well though.

For the bears, below the 6590 initial support level then 6562 is the next level of note where we have the key fib level, and bottom of the 10d Raff. Below this then the bears will start to gain the upper hand and S3 at 6500 is next up. Not sure that we will slide that far today though (Bull Monday possibly, at least initially, today I am thinking) and a rise and dip may well play out better today.

So a few key levels to keep an eye on, possible move up in gold happening that could be front running a small dip in equities for the rest of February. 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 FTSE 100, 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 FTSE, DAX, Gold and S&P.
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

Keep up to date with new content, free sign up below

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