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Fed raises rates | 7780 7815 7856 resistance | 7740 7710 7668 support

#1 · 4th May 2023, 8:57 am

Quote from Nick on 4th May 2023, 8:57 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 5th May 2023
The US Federal Reserve raised interest rates to the highest level since 2007 on Wednesday even as chairman Jerome Powell warned the recent turmoil in the banking sector would hit jobs and growth. The central bank lifted the Federal Funds rate by 0.25 percentage points to a range of 5pc to 5.25pc, extending to the Fed's most aggressive hiking cycle since the 1980s.
The FTSE 100 closed higher after a choppy trading session. The blue-chip index moved up 0.2pc to 7,788.37 after markets were dragged down on Tuesday by the selloff in US regional banks PacWest and Western Alliance.
Asian stocks and US futures edged higher as investors brushed aside the Federal Reserve’s commentary against interest-rate cuts and looked ahead to an eventual pivot to policy easing. An Asia-wide gauge of equities was on course for its best day in about three weeks, helped by an advance in Hong Kong shares. Stocks in mainland China whipsawed as they resumed trading after a three-day break, while Australian and South Korean shares trimmed early declines.
The FTSE100 has bounced back this morning from the overnight lows, as it tried to go for that 7710 daily support level. Now sitting just above the daily pivot at the 7762 level we may well see a bit of a rise initially towards the 7815 resistance zone where we have the 30m 200ema and the key fib today. This area is also the 2h resistance with the red coral here, and would be the first test of that. As such I expect a bit of a reaction here, should we get the early rise up to there. The 2h Hull MA has 7800 as resistance so definitely worth keeping an eye on this level.
We are just sat on the daily coral (green and support) at 7741 this morning and not far above the 20d Raff channel bottom at 7725. As such, and with that daily support at 7712 we may well see some brave bulls appear either here at 7740 or a bit lower at 7710.
The ASX200 had a fairly bullish session today, shaking off any overhanging concerns about the Fed rate rises. The primary focus does seem to be inflation rather that the economy as a whole at the moment. I expect we will see further increases in the UK as well. Possibly with a view to some reductions next year. Can't cut it when it's at zero really!
Above the 7820 level then the bulls will be looking to 7856 where we have R2 for today. The daily chart is still bullish at the moment, though obviously the shorter timeframes are bearish. It will be interesting to see if the bulls come out fighting today.
Below 7712 then the bears would be looking to break 7700, as that would open up a test of the 7668 S2 level. It's worth noting that the key fib is also at S1 7706. As such if 7740 breaks then I would expect this 7710 area to hold, and a long here would be worth a go.
I am also watching the S&P500 to set up a double bottom today with the 4060 level. We may well see a drop to there and then a bounce, though a break of that will likely see S1 at 4039. Dip and rise today on the S&P500 would fit the chart pretty well.
Good luck today.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 5th May 2023

The US Federal Reserve raised interest rates to the highest level since 2007 on Wednesday even as chairman Jerome Powell warned the recent turmoil in the banking sector would hit jobs and growth. The central bank lifted the Federal Funds rate by 0.25 percentage points to a range of 5pc to 5.25pc, extending to the Fed's most aggressive hiking cycle since the 1980s.

The FTSE 100 closed higher after a choppy trading session. The blue-chip index moved up 0.2pc to 7,788.37 after markets were dragged down on Tuesday by the selloff in US regional banks PacWest and Western Alliance.

Asian stocks and US futures edged higher as investors brushed aside the Federal Reserve’s commentary against interest-rate cuts and looked ahead to an eventual pivot to policy easing. An Asia-wide gauge of equities was on course for its best day in about three weeks, helped by an advance in Hong Kong shares. Stocks in mainland China whipsawed as they resumed trading after a three-day break, while Australian and South Korean shares trimmed early declines.

The FTSE100 has bounced back this morning from the overnight lows, as it tried to go for that 7710 daily support level. Now sitting just above the daily pivot at the 7762 level we may well see a bit of a rise initially towards the 7815 resistance zone where we have the 30m 200ema and the key fib today. This area is also the 2h resistance with the red coral here, and would be the first test of that. As such I expect a bit of a reaction here, should we get the early rise up to there. The 2h Hull MA has 7800 as resistance so definitely worth keeping an eye on this level.

We are just sat on the daily coral (green and support) at 7741 this morning and not far above the 20d Raff channel bottom at 7725. As such, and with that daily support at 7712 we may well see some brave bulls appear either here at 7740 or a bit lower at 7710.

The ASX200 had a fairly bullish session today, shaking off any overhanging concerns about the Fed rate rises. The primary focus does seem to be inflation rather that the economy as a whole at the moment. I expect we will see further increases in the UK as well. Possibly with a view to some reductions next year. Can't cut it when it's at zero really!

Above the 7820 level then the bulls will be looking to 7856 where we have R2 for today. The daily chart is still bullish at the moment, though obviously the shorter timeframes are bearish. It will be interesting to see if the bulls come out fighting today.

Below 7712 then the bears would be looking to break 7700, as that would open up a test of the 7668 S2 level. It's worth noting that the key fib is also at S1 7706. As such if 7740 breaks then I would expect this 7710 area to hold, and a long here would be worth a go.

I am also watching the S&P500 to set up a double bottom today with the 4060 level. We may well see a drop to there and then a bounce, though a break of that will likely see S1 at 4039. Dip and rise today on the S&P500 would fit the chart pretty well.

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