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Bulls on the back foot to start the week | 7513 7480 7440 support | 7545 7580 resistance

#1 · 22nd August 2022, 9:32 am

Quote from Nick on 22nd August 2022, 9:32 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
An Asian stock gauge pared a slide Monday but remained in the red along with US equity futures as the Federal Reserve’s commitment to tighter monetary settings to quell inflation restrained investor sentiment.
MSCI Inc.’s Asia-Pacific share index dipped less than 0.5% with losses evident in most major markets except for a smattering of gains in Hong Kong and China, where a move by banks to trim lending rates aided property developers.
Asian shares slipped on Monday and the dollar extended its climb amid angst over global growth as most major banks keep raising rates, while a modest easing by China served only to highlight troubles in its property market.
Federal Reserve Chair Jerome Powell headlines a host of policy makers at Jackson Hole later in the week and the risks are that he will not meet investor hopes for a dovish pivot on policy.
Futures are fully priced for another hike in September with the only question being whether it will be one of 50 or 75 basis points, while rates are seen up, at 3.5% to 3.75% by year end.
One exception to the tightening trend is China, where the central bank trimmed some key lending rates by between 5 and 15 basis points on Monday in an effort to support a slowing economy and a stressed housing sector. Unease over China’s economy tipped the yuan to a 23-month low, while pressuring stocks across the region.
Minutes of the European Central Bank’s last policy meeting are due this week and are likely to sound hawkish given they decided to hike by 50 basis points.
Last Legs
Sentiment toward China’s frayed financial markets looks to be on its last legs with rebounds that don’t last, inflows that don’t stick and vows of more action from Beijing that keep falling flat. For fund managers, that means facing the prospect of more losses in stocks, outflows from bonds, credit defaults and a weaker currency. Xi Jinping’s government seems increasingly powerless when it comes to reviving investor spirits. Meanwhile in the US, after a summer that saw stocks up almost 12%, that rally is set to fade.
FTSE100 live outlook prediction analysis for 22nd August 2022
A bearish start to Monday so far with the S&P testing the key 4200 support level. We may well see bounce here though as the FTSE100 is holding up pretty well and not following it down so violently so far. With S1 at 7513 to start the day I would like to see a climb from here to start with, as below that then the daily support level of 7475 is next in play as we have the 20d Raff channel bottom here.
The FTSE100 daily chart remains bullish with the Raff channels both continuing to rise, however after the drop on Friday from the 7575 level we have a bearish 2h chart to start the week. Coupled with a weaker Asia session, the bulls are starting on the back foot and a bull Monday will need to be fought hard for today.
Below 4200 on the S&P then 4190 is next then 4183 for a test of the 200ema on the daily, and just above S2 at 4176. I do think that the bulls will defend that 4200 area though, at least initially. If it breaks though then a drop down to test the 25ema on the daily chart at 4140 looks distinctly possible!
For the FTSE100 then a rise towards the daily pivot at 7545, and a test of the red 30m coral at 7550 to start with looks possible. The bulls will of course be trying to push higher to try and get that 7600 level once again, though 7575 remains resistance. We also have R1 at 7579, and then the key fib at 7583 for today.
Above that then 7600 as mentioned, with 7635 daily level next up. Not sure that we will add 100 points from where we are as I write this though! The rate rises are back on the agenda as well though inflation should be tempered soon as oil continues to drop.
Not too much more to say really. Looking at a rise and dip to play out today and watching that 4200 level closely on the S&P for a decent bounce here.
Good luck today.
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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.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

An Asian stock gauge pared a slide Monday but remained in the red along with US equity futures as the Federal Reserve’s commitment to tighter monetary settings to quell inflation restrained investor sentiment.

MSCI Inc.’s Asia-Pacific share index dipped less than 0.5% with losses evident in most major markets except for a smattering of gains in Hong Kong and China, where a move by banks to trim lending rates aided property developers.

Asian shares slipped on Monday and the dollar extended its climb amid angst over global growth as most major banks keep raising rates, while a modest easing by China served only to highlight troubles in its property market.

Federal Reserve Chair Jerome Powell headlines a host of policy makers at Jackson Hole later in the week and the risks are that he will not meet investor hopes for a dovish pivot on policy.

Futures are fully priced for another hike in September with the only question being whether it will be one of 50 or 75 basis points, while rates are seen up, at 3.5% to 3.75% by year end.

One exception to the tightening trend is China, where the central bank trimmed some key lending rates by between 5 and 15 basis points on Monday in an effort to support a slowing economy and a stressed housing sector. Unease over China’s economy tipped the yuan to a 23-month low, while pressuring stocks across the region.

Minutes of the European Central Bank’s last policy meeting are due this week and are likely to sound hawkish given they decided to hike by 50 basis points.

Last Legs
Sentiment toward China’s frayed financial markets looks to be on its last legs with rebounds that don’t last, inflows that don’t stick and vows of more action from Beijing that keep falling flat. For fund managers, that means facing the prospect of more losses in stocks, outflows from bonds, credit defaults and a weaker currency. Xi Jinping’s government seems increasingly powerless when it comes to reviving investor spirits. Meanwhile in the US, after a summer that saw stocks up almost 12%, that rally is set to fade.

FTSE100 live outlook prediction analysis for 22nd August 2022

A bearish start to Monday so far with the S&P testing the key 4200 support level. We may well see bounce here though as the FTSE100 is holding up pretty well and not following it down so violently so far. With S1 at 7513 to start the day I would like to see a climb from here to start with, as below that then the daily support level of 7475 is next in play as we have the 20d Raff channel bottom here.

The FTSE100 daily chart remains bullish with the Raff channels both continuing to rise, however after the drop on Friday from the 7575 level we have a bearish 2h chart to start the week. Coupled with a weaker Asia session, the bulls are starting on the back foot and a bull Monday will need to be fought hard for today.

Below 4200 on the S&P then 4190 is next then 4183 for a test of the 200ema on the daily, and just above S2 at 4176. I do think that the bulls will defend that 4200 area though, at least initially. If it breaks though then a drop down to test the 25ema on the daily chart at 4140 looks distinctly possible!

For the FTSE100 then a rise towards the daily pivot at 7545, and a test of the red 30m coral at 7550 to start with looks possible. The bulls will of course be trying to push higher to try and get that 7600 level once again, though 7575 remains resistance. We also have R1 at 7579, and then the key fib at 7583 for today.

Above that then 7600 as mentioned, with 7635 daily level next up. Not sure that we will add 100 points from where we are as I write this though! The rate rises are back on the agenda as well though inflation should be tempered soon as oil continues to drop.

Not too much more to say really. Looking at a rise and dip to play out today and watching that 4200 level closely on the S&P for a decent bounce here.

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