Quote from Nick on 27th May 2021, 10:32 am

FTSE 100 live outlook prediction analysis for 27th May 2021

The FTSE 100 fell 2.86 points to 7,026.93 as it was dragged predominantly by banking stocks. AstraZeneca also fell 63p to £80.20 after the EU told a court that the pharmaceutical company should pay multimillion-euro daily penalties if it fails to deliver vaccines on time. Helping to stem the benchmark’s losses was speciality chemical maker Croda International, which jumped 180p to £70.18 – its highest ever share price – after Goldman Sachs upgraded the stock to “buy” from “sell”.

Britain's pound traded within recent ranges against the dollar and the euro on Wednesday as a lack of fresh economic catalysts in a sparse data calendar kept the currency in consolidation mode. Recent movements in sterling have been dictated largely by the direction of the U.S. dollar, rather than any strong fundamental catalysts, analysts say.

Engagement, No More

The U.S. is entering a period of intense competition with China as its government becomes ever more tightly controlled by President Xi Jinping, the White House’s top official for Asia said. “The period that was broadly described as engagement has come to an end,” Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council, said at an event hosted by Stanford University, adding that the new “dominant paradigm is going to be competition.” His remarks came as Joe Biden ordered the U.S. intelligence community to determine where the Covid-19 virus came from, after conflicting assessments of whether its origins are natural or from a lab accident in China. The move is certain to anger officials in Beijing.

Markets Lift

Asian stocks are set for a steady open after gains in U.S. shares tied to the economic reopening from the pandemic. The dollar climbed with Treasury yields. Japanese, Australian and Hong Kong equity futures were little changed. In the U.S., small-caps surged, while energy producers and retailers helped the S&P 500 to a more modest increase. Banks advanced after the chief executives from the largest lenders testified before Congress. Oil was steady above $66 a barrel, while gold slipped from a four-month high. Bitcoin retreated back below $40,000.[Bloomberg]

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

The bulls managed to keep the FTSE 100 above the 7000 level yesterday and we got a decent drop off the 2 hour resistance at 7050 as well. For today, the bulls are still defending, both 4185 on the S&P where we now have the 200ema 30m and S1, and 7023 to start with on the FTSE (with 7000 below that).

7000 coincides with S1 for today, and is also just above the green daily coral at 6989 for this morning. If we do get a drop down to here then it would be good to see the bulls defend it. We are just on the daily pivot and 30min support at 7023 to start with as I am writing this and we may well see this level hold, for a rise towards the recent high at 7079. Should the bulls break through this level then 7125 is the next level of note, though we do have R3 at 7107 just below that.

If the S&P can hold the 4185 support (200ema and S1) then we should get a rise to the 2h resistance at 4214 and possibly higher. The top off the Raff channels are around the 4300 level so ultimately we may well get a rise to that area.

Back to the FTSE, and should the bears break 7000, then S2 is at 6972 and just below the fib level of 6982. Worth keeping an eye on this area, as a break below 6972 will see a slide towards the 6950 daily support. A break of that gets things a lot more bearish and a slide down to bottom of the Raffs at 6850ish could easily play out. That said, the bulls are defending pretty well and since the drop in early May to 6830 we have remained fairly bullish and may well continue to do so. Certainly leaning towards more upside myself into June now.

So, expecting a bit more bullishness to come today. We do have significant news though with the U.S. initial jobless claims, GDP, durable goods and pending home sales out today, which may well garner some US reactions.

Good luck today.

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