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ECB raises | BoE to follow | 7650 7696 7713 resistance | 7614 7587 support

#1 · 16th June 2023, 8:30 am

Quote from Nick on 16th June 2023, 8:30 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 analysis & prediction for 16th June 2023
FTSE 100 closed higher as higher oil prices lift energy stocks
The FTSE 100 closed 0.35pc higher at 7,628.26. The blue-chip index was lifted by Shell (share price up 1.03pc) and Astrazeneca (up 1.53pc), offsetting falls among some of the UK’s largest lenders - including NatWest and Barclays. The commodity-heavy FTSE 100 was also boosted by energy stocks, which climed 0.7pc after by oil prices rose on a weaker dollar and signals that demand from top crude importer China will improve. The mid-cap FTSE 250 index closed down 0.71pc at 19,039.41.
The European Central Bank raised interest rates to their highest level since 2001, triggering a jump in borrowing costs as president Christine Lagarde warned that stubborn inflation meant more increases were on the way. The ECB raised all three of its key interest rates by 0.25 percentage points, taking the key deposit rate to a 22 year high of 3.5pc. The action is in line with expectations. Ms Lagarde said that it was “very likely” that rates will increase again at its next meeting in July.
Asian equities headed for a third weekly gain, helped along by expectations of more stimulus from China. Benchmarks in China, Australia and South Korea rose Friday. An advance for Hong Kong’s Hang Seng Index placed the gauge on pace for its second week of gains in excess of 2%, as worries about Chinese growth morph into hopes for further policy support.
FTSE 100 Outlook and Prediction
The bulls are back in charge as we had yet another strong Thursday, which bodes well for more upside today. They have managed to pull away from the 7600 level now, and also just pushing past the 7640 level which has capped recent rises. 7650 is R1 to start with, and we may well see a bit of a retrace here, down towards the daily pivot level at 7614, before some more upside towards the 7700 level.
Around the 7715 area we have a cluster of resistance levels that will come into play, namely the top of the Raff channels, and then the first test of the red daily coral line at the 7719 level.
As I write this it is just pushing through the 7645 daily 25ema, and a decent break of this today may well then start to turn the daily chart more bullish. The 2h chart is bullish as you would expect after yesterday's rise, and has support at the 7600 area.
The S&P500 will also need to push on and also remains bullish for the moment. The 4410 Hull MA 2h level is key support today and then the 4380 level below that with the green 2h coral here. I would like to see any test of either or both of these defended and then more upside towards the 4450 or higher levels.
If the bears were to break the 7610 level though, then a slide down to test the daily support at 7574 would probably occur, and then S2 at 7550 below that. The bears are on the back foot though, and as mentioned, we have had several strong bullish Fridays recently. The ASX200 was also strong today, here thinking we may well follow suit.
After the ECB raised rates again, I expect the BoE will as well on the 22 June. Inflation in the UK persists for the time being, despite it dropping in the US, hence the Fed pausing.
I don't think we will get much above the 7720 level if we do get there today but do bear in mind that as it is Friday it can do anything! Stay nimble and dial down the risk a bit if so inclined.
Good luck and have a great weekend.
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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

FTSE100 analysis & prediction for 16th June 2023

FTSE 100 closed higher as higher oil prices lift energy stocks
The FTSE 100 closed 0.35pc higher at 7,628.26. The blue-chip index was lifted by Shell (share price up 1.03pc) and Astrazeneca (up 1.53pc), offsetting falls among some of the UK’s largest lenders - including NatWest and Barclays. The commodity-heavy FTSE 100 was also boosted by energy stocks, which climed 0.7pc after by oil prices rose on a weaker dollar and signals that demand from top crude importer China will improve. The mid-cap FTSE 250 index closed down 0.71pc at 19,039.41.

The European Central Bank raised interest rates to their highest level since 2001, triggering a jump in borrowing costs as president Christine Lagarde warned that stubborn inflation meant more increases were on the way. The ECB raised all three of its key interest rates by 0.25 percentage points, taking the key deposit rate to a 22 year high of 3.5pc. The action is in line with expectations. Ms Lagarde said that it was “very likely” that rates will increase again at its next meeting in July.

Asian equities headed for a third weekly gain, helped along by expectations of more stimulus from China. Benchmarks in China, Australia and South Korea rose Friday. An advance for Hong Kong’s Hang Seng Index placed the gauge on pace for its second week of gains in excess of 2%, as worries about Chinese growth morph into hopes for further policy support.

FTSE 100 Outlook and Prediction

The bulls are back in charge as we had yet another strong Thursday, which bodes well for more upside today. They have managed to pull away from the 7600 level now, and also just pushing past the 7640 level which has capped recent rises. 7650 is R1 to start with, and we may well see a bit of a retrace here, down towards the daily pivot level at 7614, before some more upside towards the 7700 level.

Around the 7715 area we have a cluster of resistance levels that will come into play, namely the top of the Raff channels, and then the first test of the red daily coral line at the 7719 level.

As I write this it is just pushing through the 7645 daily 25ema, and a decent break of this today may well then start to turn the daily chart more bullish. The 2h chart is bullish as you would expect after yesterday's rise, and has support at the 7600 area.

The S&P500 will also need to push on and also remains bullish for the moment. The 4410 Hull MA 2h level is key support today and then the 4380 level below that with the green 2h coral here. I would like to see any test of either or both of these defended and then more upside towards the 4450 or higher levels.

If the bears were to break the 7610 level though, then a slide down to test the daily support at 7574 would probably occur, and then S2 at 7550 below that. The bears are on the back foot though, and as mentioned, we have had several strong bullish Fridays recently. The ASX200 was also strong today, here thinking we may well follow suit.

After the ECB raised rates again, I expect the BoE will as well on the 22 June. Inflation in the UK persists for the time being, despite it dropping in the US, hence the Fed pausing.

I don't think we will get much above the 7720 level if we do get there today but do bear in mind that as it is Friday it can do anything! Stay nimble and dial down the risk a bit if so inclined.

Good luck and have a great weekend.

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