Quote from Nick on 3rd March 2022, 9:55 am

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

The FTSE 100 clawed back its losses as higher commodity prices prop up energy and mining stocks. London's leading index rose 1.4pc to close at 7,429.

Most Asian stocks rose Thursday in the wake of reassuring comments on monetary-policy tightening from Federal Reserve Chair Jerome Powell, while crude oil extended gains sparked by Russia’s invasion of Ukraine.

Japan led a climb in an Asian share index, while Chinese technology stocks lagged. European futures and U.S. contracts were steady after broad rallies lifted the S&P 500 and Nasdaq 100 on Wednesday.

Powell in testimony to U.S. lawmakers backed a measured Fed interest-rate liftoff and vigilance on inflation, while indicating the world’s biggest economy can weather higher borrowing costs.

The sanctions imposed on Russia for the invasion have caused traders to back away from its resources, stoking fears of shortfalls in energy, grains and metals. Brent oil was near $117 a barrel and a commodity index is at a record.

Haven demand triggered by the war moderated. Bonds in Australia retreated, while Treasuries edged up but pared only part of the sharp losses they suffered Wednesday. The U.S. 10-year yield -- at about 1.85% -- remains below the 2% levels seen before Russia’s action. The dollar inched higher, while gold dipped.

Powell voiced support for a quarter-point Fed rate hike later this month. He also indicated the central bank may have to take tougher action if price pressures don’t start to ease. The bond market expects about five quarter-point moves this year.

Gaining Traction
Russia’s claim to have captured the port city of Kherson in southern Ukraine makes it increasingly clear that its invasion, while slowed in the north, is gaining traction in the country’s coastal plains. Along with a shift to more aggressive artillery and aerial attacks, it is leading to a tempering of optimism over Ukraine’s ability to sustain its resistance against a vastly more powerful force.

Tackling Inflation
Federal Reserve Chair Jerome Powell is making the fight against inflation his top priority over the risks from Russia’s invasion of Ukraine, backing a quarter-point interest-rate rise later this month. He said it was too soon to conclude how Russia’s invasion of Ukraine will affect the U.S. economy, but he acknowledged that the war could trigger a long-term reordering of international relations that would likely reshape the economies of Western Europe.

FTSE 100 live outlook prediction analysis for 3rd March 2022

That was a good hold of 7300 yesterday and the bulls are hanging in there and defending above 7400 now. The 2h chart has gone bullish once again and has decent looking support at 7390 to start with today. The bulls will be keen to build on the recent rises, along with the S&P looking to break above the 4400 level. The S&P has been fairly range bound the past few sessions between 4250 and 4400 so we will more than likely get a break of that soon. Probably upwards!

Initially for the FTSE100 we may see a pop up to the key fib resistance at the 7458 level and then a drop down to that support. Above the 7460 level then the bulls will be looking at R1 at 7495 and then the daily coral at 7557 above that. The backdrop is still pretty pessimistic though the Russian sanctions are certainly having an impact on their financials. An index tracking London-traded Russian companies – including Gazprom, Sberbank and Rosneft – has plunged 98pc over the last two weeks, wiping $572bn (£428bn) off their valuations.

For support the 30m coral is first up at 7415, then we have the daily pivot and the 2h Hull MA at 7395 - and this is the level I am watching closely for decent support to start with. A break below 7390 though and we will likely see a slide down to the 7330 S1 area and breaking those 2h supports at 7395 and 7365 isnt a good sign for the bulls. That said we do have the key fib at 7350 and we may well see some defence here, at least initially. As per the past few days though the markets have something to prove that they are stronger than Russia!

Below the 7330 level then 7300 once again would be key support (though I am not expecting a drop down to this level today as I think the bulls will try and stay in control) and then 7228 S2 below that.

Oil and Gas unsurprisingly continues to rise and Oil could well get towards the $130 area where we may well see a stutter. And to think they couldn't give it away not that long ago! That rise in oil is helping to underpin the FTSE100 as well for the moment.

Going to keep this brief today but watching the 7396 level for support with 7350 and 7528 below that. Resistance I am watching 7458 and then 7495.

Good luck today.

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