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Carnage continues | 6890 6850 6830 6815 support | 6980 7037 resistance | 1% rate rise next

#1 · 28th September 2022, 10:40 am

Quote from Nick on 28th September 2022, 10:40 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

The dollar soared after the White House talked down the prospect of a currency agreement to weaken the greenback and equities extended declines in Asia after hawkish comments from Federal Reserve policymakers.

Global stocks were headed for the lowest level in almost two years as major market levels crumbled. Hong Kong’s Hang Seng benchmark was at a decade low, the yield on the US 10-year Treasury breached 4% for the first time since 2010 and a gauge of the greenback set another all-time high.

Asian share markets tumbled on Wednesday as surging borrowing costs intensified fears of a global recession, spooking investors into the arms of the safe-haven dollar and punishing currencies across the region.

Yields on U.S. 10-year Treasuries were shoved above 4.0% for the first time since 2010 as markets wagered the Federal Reserve might have to take rates past 4.5% in its crusade against inflation.

Sterling also came under renewed pressure as Moody's warned that unfunded UK tax cuts would be "negative" for the country's credit standing, deepening a damaging selloff in gilts.

S&P 500 futures got caught in the bearish mood and slipped 0.8%, while Nasdaq futures dropped 1.0%. This would be the S&P 500's seventh session of losses and threaten the technically-important 200-week average at 3,590.

EUROSTOXX 50 futures fell 1.0%, while FTSE futures lost 1.1% as European borrowing costs blew out.

Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses. Underlining the risk of yet higher interest rates, the chief economist at the Bank of England said the tax cuts would likely require a "significant policy response". Moody's on Tuesday warned the UK government that large unfunded tax cuts were "credit negative" and could undermine the government's fiscal credibility.

Sterling was under fire again at $1.0644 , with its bounce from Monday's record trough of $1.0327 stopping far short of the $1.1300 level held before last week's UK Budget. Yields on British 10-year gilts have risen a staggering 119 basis points in just four sessions to reach 4.50%, the sharpest such move since at least 1979.

Oil prices fell again as demand worries and the strong dollar offset support from U.S. production cuts caused by Hurricane Ian. Brent fell $1.17 to $85.03 a barrel, while U.S. crude lost $1.10 cents to $77.40 per barrel.

Sabotage Suspected
Russia’s energy conflict with Europe escalated dramatically as three pipelines were wrecked in suspected sabotage and Gazprom warned that the last remaining route to western Europe is at risk. As the damaged pipelines left massive bubbling gas leaks in the Baltic Sea and Swedish seismologists reported two explosions, German and US officials said the incident looked like sabotage.

FTSE100 live outlook prediction analysis for 28th September 2022

The doom and gloom continues apace and continues to weigh on sterling and the FTSE100 which has now dipped below the 7000 level again as the seasonality of a weak second half of September continues. We may well see a bit of a rise and dip play out today though as the bulls will be keen to defend the overnight lows on both the S&P500 and the FTSE100.

As such I am thinking that we may well get a rise towards the daily pivot at the 6993 level first thing. If the bulls were to break above this level then we could get 7050 where we have R1 and also a test of the 200ema on the 30m chart. Above 7050 then 7102 is the top of the 10d Raff channel and a level worth keeping an eye out for.

For the bears, they will be looking to break below the overnight lows at the 6890 level, though we have regained some ground just above S1 at 6917 so far this morning.

The bulls will basically need to be quick out the blocks today to have a hope of pushing it higher to start with.

More fears over interest rates with 5.5% mooted for November. Seems a bit high, as its already starting to trigger a panic mode in the housing markets with mortgages being pulled already. Oil has dropped off further which should filter into tempering inflation for the moment (energy still the big driver of inflation) though the Nordstream gas pipeline "attack" drove gas prices higher yesterday. The punches certainly keep coming for the new PM!

If the bears were to break below the 6890 level then we are looking at a slide down towards the bottom of the Raff channels again, around the 6800 (or just below) area. That maybe a bit too pessimistic for today but the time is certainly getting closer when it will be time to start some swing longs. Negative and pessimistic MSM, FTSE sliding but seasonality for a kick up win October bodes well. Best thing would be a hold on the rate rises for the next two months to give things a change to calm down, and let the recent rises have an effect on inflation rather than stoking fears about what lies ahead! Or maybe that's the plan!?

Anyway, looking at a rise and dip to play out today and a bullish morning looks possible.

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

The dollar soared after the White House talked down the prospect of a currency agreement to weaken the greenback and equities extended declines in Asia after hawkish comments from Federal Reserve policymakers.

Global stocks were headed for the lowest level in almost two years as major market levels crumbled. Hong Kong’s Hang Seng benchmark was at a decade low, the yield on the US 10-year Treasury breached 4% for the first time since 2010 and a gauge of the greenback set another all-time high.

Asian share markets tumbled on Wednesday as surging borrowing costs intensified fears of a global recession, spooking investors into the arms of the safe-haven dollar and punishing currencies across the region.

Yields on U.S. 10-year Treasuries were shoved above 4.0% for the first time since 2010 as markets wagered the Federal Reserve might have to take rates past 4.5% in its crusade against inflation.

Sterling also came under renewed pressure as Moody's warned that unfunded UK tax cuts would be "negative" for the country's credit standing, deepening a damaging selloff in gilts.

S&P 500 futures got caught in the bearish mood and slipped 0.8%, while Nasdaq futures dropped 1.0%. This would be the S&P 500's seventh session of losses and threaten the technically-important 200-week average at 3,590.

EUROSTOXX 50 futures fell 1.0%, while FTSE futures lost 1.1% as European borrowing costs blew out.

Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses. Underlining the risk of yet higher interest rates, the chief economist at the Bank of England said the tax cuts would likely require a "significant policy response". Moody's on Tuesday warned the UK government that large unfunded tax cuts were "credit negative" and could undermine the government's fiscal credibility.

Sterling was under fire again at $1.0644 , with its bounce from Monday's record trough of $1.0327 stopping far short of the $1.1300 level held before last week's UK Budget. Yields on British 10-year gilts have risen a staggering 119 basis points in just four sessions to reach 4.50%, the sharpest such move since at least 1979.

Oil prices fell again as demand worries and the strong dollar offset support from U.S. production cuts caused by Hurricane Ian. Brent fell $1.17 to $85.03 a barrel, while U.S. crude lost $1.10 cents to $77.40 per barrel.

Sabotage Suspected
Russia’s energy conflict with Europe escalated dramatically as three pipelines were wrecked in suspected sabotage and Gazprom warned that the last remaining route to western Europe is at risk. As the damaged pipelines left massive bubbling gas leaks in the Baltic Sea and Swedish seismologists reported two explosions, German and US officials said the incident looked like sabotage.

FTSE100 live outlook prediction analysis for 28th September 2022

The doom and gloom continues apace and continues to weigh on sterling and the FTSE100 which has now dipped below the 7000 level again as the seasonality of a weak second half of September continues. We may well see a bit of a rise and dip play out today though as the bulls will be keen to defend the overnight lows on both the S&P500 and the FTSE100.

As such I am thinking that we may well get a rise towards the daily pivot at the 6993 level first thing. If the bulls were to break above this level then we could get 7050 where we have R1 and also a test of the 200ema on the 30m chart. Above 7050 then 7102 is the top of the 10d Raff channel and a level worth keeping an eye out for.

For the bears, they will be looking to break below the overnight lows at the 6890 level, though we have regained some ground just above S1 at 6917 so far this morning.

The bulls will basically need to be quick out the blocks today to have a hope of pushing it higher to start with.

More fears over interest rates with 5.5% mooted for November. Seems a bit high, as its already starting to trigger a panic mode in the housing markets with mortgages being pulled already. Oil has dropped off further which should filter into tempering inflation for the moment (energy still the big driver of inflation) though the Nordstream gas pipeline "attack" drove gas prices higher yesterday. The punches certainly keep coming for the new PM!

If the bears were to break below the 6890 level then we are looking at a slide down towards the bottom of the Raff channels again, around the 6800 (or just below) area. That maybe a bit too pessimistic for today but the time is certainly getting closer when it will be time to start some swing longs. Negative and pessimistic MSM, FTSE sliding but seasonality for a kick up win October bodes well. Best thing would be a hold on the rate rises for the next two months to give things a change to calm down, and let the recent rises have an effect on inflation rather than stoking fears about what lies ahead! Or maybe that's the plan!?

Anyway, looking at a rise and dip to play out today and a bullish morning looks possible.

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

Keep up to date with new content, free sign up below with just your email address

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