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Bounce likely as we head towards FOMC | 6975 6930 support | 7032 7050 resistance

#1 · 28th July 2021, 10:20 am

Quote from Nick on 28th July 2021, 10:20 am
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
FTSE 100 live outlook prediction analysis for 28th July 2021
The International Monetary Fund backed Britain’s recovery as it delivered a major growth upgrade and said the UK’s world-leading vaccination drive would protect the economy against super-contagious Covid variants. The IMF's latest World Economic Outlook predicted the UK economy would advance by 7pc this year. That is the fastest pace since the Second World War and is only likely to be equalled by the US among advanced nations.
The pound jumped 0.4pc against the dollar yesterday, rising to a two week high of $1.3875. The FTSE 100 ended down 0.4pc, stuck below 7,000 points.
Well we got the bear Tuesday but a great recovery from the S3 6930 level and the bulls are back knocking on the door of 7000. Can they break it today? Initially we have a cluster of resistance levels here on the 30m chart with the coral, 25ema, 200ema and the daily pivot so we could see an initial drop down to the 6973 support level and then possibly a bounce.
The S&P bulls will be looking to defend the 200ema at 4387 this morning to set up a buy the rumour bounce ahead of the FOMC tomorrow. A push up towards 4422 looks distinctly possible if that support level can hold. If not then the key fib at 4364 will be tested.
Likewise with the Dax30 - an initial drop down to the key fib level at 15406 may well play out before a bounce to the 15530 daily pivot and possibly higher - maybe even the key fib resistance at 15626.
If the FTSE100 bulls can break above the 7000 level then we should get a rise towards 7032 key fib level, and finally a proper test of the 25ema on the daily chart at 7038. This level will be fairly key today if seen, and if the bulls can break above this then immediate threat of lots of downside is averted. If not then it could well see the bears reload here and we resume that bearishness for a trip down towards 6800 or lower during August.
Initial support though is at the 6073 level as mentioned, but below this then S1 is 6943 and with the key fib support at 6930 coinciding with yesterday's low we could see this level retested. The question then is will it hold.... If not then 6882 is S2 and more than likely the bears next likely target.
All that said I'm simply expecting a dip and rise to play out today, and looking at the initial supports to hold. Feeling bullish. Can the S&P print another ATH today/tomorrow though.....?
Good luck today.
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Asian Session
Asian stocks extended declines Wednesday as a rout in China and a mixed response to major U.S. technology earnings spurred caution. Treasuries held a climb.
MSCI Inc.’s Asia-Pacific equity gauge fell to the lowest since December as Chinese equities slipped. Modest gains in Hong Kong provided little succour after this week’s plunge on a regulatory crackdown that’s stirred questions about how far Beijing will go to curb big companies.
U.S. contracts fluctuated following the tech-heavy Nasdaq 100’s biggest decline in more than two months as major American equity indexes fell. While earnings have helped U.S. shares, results from Apple Inc., Microsoft Corp. and Alphabet Inc. got a mixed response: Apple fell in extended trading amid concern over slower growth, while Alphabet rose on Google’s strong sales.
Treasuries were boosted by the flight-to-quality sparked by the China selloff and a solid 5-year auction. The dollar was little changed after a two-day retreat. The offshore yuan pared a slide.
This week’s tumble in Chinese stocks is adding to global market unease, with investors already concerned about the economic recovery given the spread of the Covid-19 delta variant. Traders are also awaiting the Federal Reserve policy meeting, where officials are expected to consider when and how to taper the central bank’s $120 billion in monthly bond purchases. [Bloomberg]
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FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

FTSE 100 live outlook prediction analysis for 28th July 2021

The International Monetary Fund backed Britain’s recovery as it delivered a major growth upgrade and said the UK’s world-leading vaccination drive would protect the economy against super-contagious Covid variants. The IMF's latest World Economic Outlook predicted the UK economy would advance by 7pc this year. That is the fastest pace since the Second World War and is only likely to be equalled by the US among advanced nations.

The pound jumped 0.4pc against the dollar yesterday, rising to a two week high of $1.3875. The FTSE 100 ended down 0.4pc, stuck below 7,000 points.

Well we got the bear Tuesday but a great recovery from the S3 6930 level and the bulls are back knocking on the door of 7000. Can they break it today? Initially we have a cluster of resistance levels here on the 30m chart with the coral, 25ema, 200ema and the daily pivot so we could see an initial drop down to the 6973 support level and then possibly a bounce.

The S&P bulls will be looking to defend the 200ema at 4387 this morning to set up a buy the rumour bounce ahead of the FOMC tomorrow. A push up towards 4422 looks distinctly possible if that support level can hold. If not then the key fib at 4364 will be tested.

Likewise with the Dax30 - an initial drop down to the key fib level at 15406 may well play out before a bounce to the 15530 daily pivot and possibly higher - maybe even the key fib resistance at 15626.

If the FTSE100 bulls can break above the 7000 level then we should get a rise towards 7032 key fib level, and finally a proper test of the 25ema on the daily chart at 7038. This level will be fairly key today if seen, and if the bulls can break above this then immediate threat of lots of downside is averted. If not then it could well see the bears reload here and we resume that bearishness for a trip down towards 6800 or lower during August.

Initial support though is at the 6073 level as mentioned, but below this then S1 is 6943 and with the key fib support at 6930 coinciding with yesterday's low we could see this level retested. The question then is will it hold.... If not then 6882 is S2 and more than likely the bears next likely target.

All that said I'm simply expecting a dip and rise to play out today, and looking at the initial supports to hold. Feeling bullish. Can the S&P print another ATH today/tomorrow though.....?

Good luck today.

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Asian Session

Asian stocks extended declines Wednesday as a rout in China and a mixed response to major U.S. technology earnings spurred caution. Treasuries held a climb.

MSCI Inc.’s Asia-Pacific equity gauge fell to the lowest since December as Chinese equities slipped. Modest gains in Hong Kong provided little succour after this week’s plunge on a regulatory crackdown that’s stirred questions about how far Beijing will go to curb big companies.

U.S. contracts fluctuated following the tech-heavy Nasdaq 100’s biggest decline in more than two months as major American equity indexes fell. While earnings have helped U.S. shares, results from Apple Inc., Microsoft Corp. and Alphabet Inc. got a mixed response: Apple fell in extended trading amid concern over slower growth, while Alphabet rose on Google’s strong sales.

Treasuries were boosted by the flight-to-quality sparked by the China selloff and a solid 5-year auction. The dollar was little changed after a two-day retreat. The offshore yuan pared a slide.

This week’s tumble in Chinese stocks is adding to global market unease, with investors already concerned about the economic recovery given the spread of the Covid-19 delta variant. Traders are also awaiting the Federal Reserve policy meeting, where officials are expected to consider when and how to taper the central bank’s $120 billion in monthly bond purchases. [Bloomberg]

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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