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Bulls on the back foot with a dip ad rise possible | 7730 7711 support | 7780 7813 resistance

FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 25th January 2023

The FTSE 100 lost 0.3pc after a grim day of economic statistics yesterday, with government borrowing surging and business activity falling. The blue-chip index has been dragged down by drugsmakers AstraZeneca and GSK.

US and European stock futures fell Wednesday while Asian stocks eked out small gains amid downbeat investor sentiment following mixed corporate earnings. Contracts for the Nasdaq 100 fell 0.8% after a slight decline in the underlying index on Tuesday, with a slowing sales outlook for Microsoft Corp.’s cloud-computing business setting the tone as Asian trading got underway. Futures for the S&P 500 and Euro Stoxx 50 benchmarks also dropped.

Asian equities extended their winning run to scale their highest levels in seven months on Wednesday, with South Korean stocks leading the way, and the Australian dollar hit multi-month highs as surging inflation made higher interest rates more likely.

Stronger-than-expected economic data in Europe has eased market worries of a sharp recession in the euro zone as energy prices decline, though interest rates are still seen creeping up.

The bulls failed to hold onto the 7800 level yesterday though the S&P was more optimistic and remains around the 4000 level. We may well see an initial kick up today before a bit more downside, as the bears look like they may well want to test the 7720 support area soon. The bulls meanwhile will be looking to get the price back above 7800 ASAP!

Initial resistance is at the 7781 level and then 7813 above that. With the weakness yesterday the 10d Raff channel is heading down, while the 20d continues to head up, and the bottom of that channel is at 7725 as well - aligning nicely with S1 and just above the key fib at 7711.

As such should we see a drop down to this area then it looks good for a bounce. They defended the 7740 level yesterday after the break down of 7780, so there is still buying pressure around, albeit on the back foot.

Above the 7820 level then the bulls will be looking again at the 7872 level which is the next daily area of note. Adding 100 points today might be a big ask but you never know.  7832 is also R2 for today. The daily chart EMAs do remain bullish for the moment as well.

The S&P500 chart looks more positive than the FTSE100 though, especially the 2h chart, and if that were to continue to push higher then it may well pull the FTSE100 with it. It's done well since testing the 200ema on 16th December and the Santa Rally has continued well into the new year with only a small drop off the 7875 playing out so far. Seasonally it's usually a bigger drop mid January, so its definitely the bulls keeping the upper hand at the moment.

Not too much more to say really today, keep an eye on the key levels and the trade plan, and lets see how today unfolds.

Good luck.

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