Quote from Nick on 17th March 2022, 9:30 am

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

The FTSE 100 has risen to near two-week highs as prospects of peace talks between Russia and Ukraine and Chinese stimulus lifted investor sentiment globally.

The blue-chip index climbed 1.6pc to 7,291, with base metal miners and banks leading the gains.

The Federal Reserve has increased interest rates for the first time since before Covid as officials battle to contain an inflationary spiral worsened by Vladimir Putin's invasion of Ukraine.

Jerome Powell, the central bank’s chairman, said the war is driving up energy and commodities prices in an economy already wracked by steep price rises.

The Fed is now expecting to increase rates six more times this year to combat inflation, which has rocketed to a 40-year high of 7.9pc even before the effects of Mr Putin's war begin to register.

Officials also slashed predicted US economic growth rates to 2.8pc this year, down from a prediction of 4pc in December.

It came as the International Energy Agency (IEA) warned that markets are facing their biggest oil price shock in decades and Russia lurched a step closer to a sovereign default.

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Stocks jumped Thursday on a surge in Chinese technology shares and as traders digested the Federal Reserve’s view that a robust U.S. economy can weather the campaign against high inflation now underway.

Asia-Pacific equities rose over 3%, with China’s effort to stabilize markets, unveiled a day ago, boosting Hong Kong and yen weakness spurring Japan. U.S. futures fluctuated after the S&P 500’s best two-day advance since 2020. Possible progress on Russia-Ukraine cease-fire talks is also helping sentiment.

The Fed raised rates by a quarter percentage point and signaled hikes at all six remaining meetings in 2022. Chair Jerome Powell said the U.S. economy is “very strong” and can handle monetary tightening.

Treasuries advanced, while a portion of the bond curve -- the gap between five- and 10-year yields -- inverted for the first time since March 2020. For some, the latter highlights a growing risk that the Fed’s efforts to rein in inflation could trigger an economic downturn.

The dollar was steady and the yen hovered near a six-year low. Oil snapped a three-day drop but remains down more than 10% for the week.

FTSE 100 live outlook prediction analysis for 17th March 2022

The bulls have managed to push on but the S&P500 is now nearing some key daily resistance at the 4395 level and we may well see a stutter here. The top of the 10d Raff channel and the daily 200ema are both here, and as the Fed rate hike filters though we may well see some profit taking and a bit of a drop. We also have the BoE today with an expected 25bps rate rise as well, to follow the Fed's lead, as they attempt to temper inflation. That news will be out at midday.

Initially today we have resistance at the 7335 level which is the overnight high and also the key fib to start with. As such, if the bears have a go here then we may well see a drop down to the 7275 daily pivot area, though ultimately if the bears get stronger we could get as low as the 7210 S1 level. We would also have a test of the 30m and daily 200ema's here so in theory it should be decent support.

Above the 7335 level then the bulls will be looking towards 7400 and 7445 daily resistance level above that. Seems it might be a big ask for today as it feels like we will get more of a dip and rise play out. Especially on the S&P500 which looks ripe for a dip down to the 4280ish area with decent support here. 4380 and then the 4395 as mentioned looks decent resistance to start with as well.

Below 7200 then the bearish case gets stronger and a drop down to the 7109 S2 level could play out though that feels a bit too bearish for today! Never say never though.

Gold has been front running equity moves well recently, and with the gold bulls fighting back from that drop yesterday and that now back above 1930 that would suggest that a dip in equities today may well play out.

The Dax could potentially drop as low as the 14321 daily pivot level today and we may well see a bounce here. It's also getting near to the top of the 20d Raff channel at 14730 and with R1 just belo at 14715 we could well see the bears appear here.

Not too much more to say really, looks like a dip and rise for today across the board. Don't forget BoE at 12pm. Key support 7275 and 7210, key resistance levels 7335 and 7380.

Good luck today.

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