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Bulls just about in control still | 7075 7125 resistance | 7045 7025 7015 support

FTSE 100 live outlook prediction analysis for 25th May 2021

Consumer-related stocks helped tip London markets into the green, following two weeks of drops, helped by a weekend of Covid restrictions being eased. The domestically-focused FTSE 250 index added 84.31 points to close at 22,483. Gambling company Rank Group led the leaderboard, rising 14.2p to 196.2p, followed by Mr Kipling’s parent Premier Foods, which gained 6p to 107.6p.

Joining them in the top 10 was Frankie & Benny’s owner The Restaurant Group, which added 6.4p to 128.4p, as well as pub chain Wetherspoon.
Similar types of blue-chip companies helped push the FTSE 100 to close in positive territory, though gains were tempered by miners which mostly fell after China’s commodity price warnings. Meanwhile, stocks globally struggled for momentum as investors awaited key US inflation readings for guidance on monetary policy. London’s benchmark FTSE 100 edged up 33.54 points to close at 7,051.59

Heavyweight oil stocks also performed well as oil prices extended Friday’s rally and climbed higher after Iran said that gaps remain in negotiations aimed at reaching a deal to end US sanctions on its crude. Iran said there are still differences around the timing of when countries will return to compliance with the original 2015 nuclear agreement, allaying some concern about a rapid ramp-up in the Persian Gulf nation’s output.
While the market is anticipating the Islamic Republic’s supply will pick up again by late summer, the demand recovery will be strong enough to absorb it, according to Goldman Sachs. The bank expects Brent futures to hit $80 (£57) a barrel in the next few months.

New Hurdles

The U.S. said Americans should avoid traveling to Japan, with the country under a state of emergency over a widening Covid-19 outbreak that has sown doubts about Tokyo’s plans to host the Olympics in less than two months. The action is a fresh blow to a country struggling to convince its own public and the international community that it’s ready to host the Games. Meanwhile, organizers will decide next month whether or not to allow any spectators watch the events. Barring domestic fans would deliver a significant financial blow.

Worries on Hold

Asian stocks are set to open higher after technology shares led gains in the U.S. as investors put inflation worries on the backburner for now. Futures pointed higher in Japan, Australia and Hong Kong. The S&P 500 rose and the Nasdaq 100 outperformed amid a rally in technology giants. Bitcoin soared after plunging as much as 18% on Sunday. Benchmark 10-year Treasury yields and the dollar retreated. Oil jumped by the most in a month after Iran said that gaps remain in negotiations aimed at reaching a deal to end U.S. sanctions on its crude, which would add to supply in the market.[Bloomberg]

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

We bounced just above the 7010 level yesterday and the bulls have defended well and it looks like we will test the R1 and daily resistance level at 7075 first thing. We should see a reaction here and a dip down towards the daily pivot at 7045 if that holds. Ultimately, if the bulls can keep the momentum then I am thinking that we will see a similar pattern to yesterday with a rise towards the 7125 resistance level where we have daily resistance and R3.

The S&P looks like it should get R1 and the key fib at 4122 this morning and again, we could see a modest dip off this level, down to the daily pivot at 4192. Again, the bulls may well step in here to keep their momentum going.

I had expecting us to reach 7075 yesterday on that climb from 7012 but it was pretty slow, not helped by most of Europe off for the public holiday, so we should see that tested today instead. R2 is at 7097 for today and inbetween those two important levels so worth keeping an eye on this area too.

The 2 hour chart remains bullish and the green coral has support at 7011 for the moment, so a possible test and hold of yesterdays low. That's the level to watch below 7045, though we do also have S1 and the 200ema at 7025 as well. Lower down the key fib coincides with the round number of 7000 so a few levels of note to watch for. I would like to see the daily pivot hold though if we are going to push up past the 7125 level this week.

The top of the S&P Raff channels are coming into view though, at 4265-4270, and with the 20 day channel heading down this level could be pretty key. If we were to get that area today then a short here would be worth taking. We could see a "buy the rumour, sell the news" rise as well ahead of the data on Thursday as we have U.S. initial jobless claims, GDP, durable goods and pending home sales that day.

So, watch 7075 and 7125 as the main resistance levels, 7045 and 7011 as the supports. Good luck today.

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