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ECB and BOE today with 50bps expected | 7775 7734 7690 support | 7812 7836 7885 resistance

#1 · 2nd February 2023, 10:03 am

Quote from Nick on 2nd February 2023, 10:03 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 2nd February 2023

The US economy still faces more punishing rate rises even as inflation slows rapidly, the head of the Federal Reserve has warned. Chairman Jerome Powell said the bank had “more work to do” to bring inflation back to its 2pc target despite signs that price rises are slowing. The Fed this evening lifted the target US interest rate by 0.25 percentage points to 4.5 to 4.75pc, returning to smaller adjustments for the first time since the beginning of the most aggressive round of hikes since the 1980s.

The downshift in momentum prompted US stock markets to rally, with the S&P 500 up by as much as 1pc. However, Mr Powell signalled at least two more rate increases were likely this year and any cuts were unlikely until at least 2024.

The Bank of England is expected to raise rates by another 0.5 percentage points tomorrow, but may slow the pace of increases after that. The European Central Bank, which was slower to raise rates, will likely also opt for a half-point increase when its governing council meets on Thursday. ECB head Christine Lagarde has repeatedly said that the central bank still has further to go.

And onto the next news day today with ECB and BOE interest rates. Don't really expect any surprises from that which has been mooted already, with the BOE likely to raise by half a percent.

For today we may well see the usual buy the rumour sell the news play out and finally get a rise towards the 7835 daily resistance level. That also aligns with the key fib for today, and as such we may well see the bears have a go here, as well as some profit taking from the bulls. Above this level then the next daily resistance level is at 7885 and should the market decide that the BOE news is welcome we could get that high.

Meta earnings came in well yesterday and with Apple and Google today we could see the same again. Decent earnings coupled with the cost cutting and lay offs helping to fuel the prices across the tech sector.

The bulls will be keen to break and hold on above the 7800 level today and as mentioned yesterday we are within touching distance of the 7920 all time high area as well. Will we see a test of that in February?

For the bears then the key first support is pretty much where we are as I write this, and that is the daily pivot and 30m coral (green) at 7780. We are also just above the 30m 200ema here at 7773 hence I am thinking that we will get an initial move up from these supports this morning.

The BoE announcement is at midday so expect some moves then and then the ECB at 1315 followed by their press conference at 1345.

Below the 7770 area then 7734 is the key fib, with yet another test of the 7710 area likely below that. Should it get very bearish today then the daily support at 7680 is below that, though that seems rather pessimistic for today given the current price and general feeling.

The Fed news yesterday certainly explains that move down to 3993 on the SP on Tuesday and subsequent bounce anyway......

So really it's all about interest rates again today, so watch for that. A rise and dip maybe....... Good luck!

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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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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

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

FTSE100 live outlook prediction analysis for 2nd February 2023

The US economy still faces more punishing rate rises even as inflation slows rapidly, the head of the Federal Reserve has warned. Chairman Jerome Powell said the bank had “more work to do” to bring inflation back to its 2pc target despite signs that price rises are slowing. The Fed this evening lifted the target US interest rate by 0.25 percentage points to 4.5 to 4.75pc, returning to smaller adjustments for the first time since the beginning of the most aggressive round of hikes since the 1980s.

The downshift in momentum prompted US stock markets to rally, with the S&P 500 up by as much as 1pc. However, Mr Powell signalled at least two more rate increases were likely this year and any cuts were unlikely until at least 2024.

The Bank of England is expected to raise rates by another 0.5 percentage points tomorrow, but may slow the pace of increases after that. The European Central Bank, which was slower to raise rates, will likely also opt for a half-point increase when its governing council meets on Thursday. ECB head Christine Lagarde has repeatedly said that the central bank still has further to go.

And onto the next news day today with ECB and BOE interest rates. Don't really expect any surprises from that which has been mooted already, with the BOE likely to raise by half a percent.

For today we may well see the usual buy the rumour sell the news play out and finally get a rise towards the 7835 daily resistance level. That also aligns with the key fib for today, and as such we may well see the bears have a go here, as well as some profit taking from the bulls. Above this level then the next daily resistance level is at 7885 and should the market decide that the BOE news is welcome we could get that high.

Meta earnings came in well yesterday and with Apple and Google today we could see the same again. Decent earnings coupled with the cost cutting and lay offs helping to fuel the prices across the tech sector.

The bulls will be keen to break and hold on above the 7800 level today and as mentioned yesterday we are within touching distance of the 7920 all time high area as well. Will we see a test of that in February?

For the bears then the key first support is pretty much where we are as I write this, and that is the daily pivot and 30m coral (green) at 7780. We are also just above the 30m 200ema here at 7773 hence I am thinking that we will get an initial move up from these supports this morning.

The BoE announcement is at midday so expect some moves then and then the ECB at 1315 followed by their press conference at 1345.

Below the 7770 area then 7734 is the key fib, with yet another test of the 7710 area likely below that. Should it get very bearish today then the daily support at 7680 is below that, though that seems rather pessimistic for today given the current price and general feeling.

The Fed news yesterday certainly explains that move down to 3993 on the SP on Tuesday and subsequent bounce anyway......

So really it's all about interest rates again today, so watch for that. A rise and dip maybe....... Good luck!

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