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FTSE 100 lagging but S&P could get 3925 | NFP Data today | 6550 6600 resistance | 6450 6400 support

#1 · 5th February 2021, 10:30 am

Quote from Nick on 5th February 2021, 10:30 am
FTSE 100 live outlook prediction analysis for 5th February 2021
A“rapid” Covid recovery is likely as Britain's economic prospects are transformed by its record-breaking vaccination drive, Bank of England Governor Andrew Bailey has said. The country's economy will suffer a 4pc in the current quarter as a third lockdown bites, the Bank said - a double-dip recession will be avoided after a smaller autumn hit than feared.

With more than 10m people vaccinated so far, Threadneedle Street expects the current restrictions to be lifted gradually from April and to be largely gone by the autumn, helping output to “recover rapidly towards pre-Covid levels over 2021”.
The boost means the economy will have returned to its pre-pandemic size by 2022, despite a weaker than expected start to this year after a highly infectious mutant strain took hold. This would be a remarkable bounceback after Covid triggered the biggest hit to GDP since at least the First World War.
The central bank lowered its growth forecast for 2021 as a whole to 5pc from November’s 7.25pc, but raised its forecast for 2022 to 7.25pc from 6.25pc.
Negative Rates
Threadneedle Street has given lenders six months to get ready for negative interest rates, but Mr Bailey stressed that these preparations do not mean they will be used. He added: “My message to markets is you really should not try to read the future behavior of the monetary policy committee from the actions we’re taking on our toolbox."
Financial markets took the six-month delay before any such move and the optimistic tone of its forecasts as a positive signal, pushing the pound to its strongest level against the euro since May. The UK’s benchmark cost of borrowing for 10 years rose to its highest level since the outbreak last March.
The monetary policy committee agreed unanimously to keep interest rates at 0.1pc and hold its bond-buying programme steady at £895bn.[Bloomberg]
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US & Asia Overnight from Bloomberg
Asian stocks pushed higher Friday after their U.S. peers climbed to a record on signs of a healing labor market and improving coronavirus trends. Treasuries were steady after a widely watched segment of the yield curve steepened to levels last seen in 2015.
Japan and Hong Kong were among markets leading the gains. S&P 500 futures ticked higher after the benchmark closed up more than 1%, led by banks and tech shares, while the Russell 2000 Index of smaller companies climbed 2%. Earnings remained in focus with EBay Inc. and PayPal Holdings Inc. surging on upbeat forecasts. The dollar held an overnight gain. Crude oil advanced and gold steadied after Thursday’s decline.
In Hong Kong, short-video startup Kuaishou Technology surged more than 190% on its debut after one of the city’s biggest initial-public offerings in years.
Global equities are flirting with all-time highs as corporate profits rebound, central banks remain supportive amid the pandemic and as U.S. President Joe Biden tries to fast-track a $1.9 trillion stimulus package. A report Thursday showed U.S. jobless claims fell to the lowest since November, and investor focus now turns to payroll data Friday.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
The FTSE 100 has certainly been lacking the enthusiasm of its peers this week, hovering around the 6500 level yesterday while the S&P pushed on. The S&P looks like it will be on for a test of the top of the Raff channels on the daily chart, both of which are at the 3925 level for today - ergo a short here is worth a go as we may well see the bears appear here.
For the FTSE 6450 and 6550 are looking like the main levels to watch today. Above the 6550 level then we should get a rise (in theory anyway!) to the 6600 level where we have the 25ema on the daily and also the R2 level for today. Below 6450 then a slide down towards S3 at 6388 looks likely.
That said there is also initial support at the 6491 level where we have the green 2 hour coral line (this held well yesterday with a couple of tests already), and a fib level at 6480, with S1 below that at 6468, and then a better fib at 6463. As such, should we get an initial dip down towards that 6470 level then we may well see a bounce here. Initially it does look like a dip and rise will play out today across the board. The other thing to bear in mind is that we have NFP today, and its Friday! The US may well go for the late Friday buying spree as well.
NFP is forecast at 50k, versus -140k previously, while the unemployment rate is forecast to remain the same at 6.7%. 13:30 this afternoon for the release of that data.
Below 6450 and the bears will be looking to take it down to 6410, and keep the bearish momentum going on the daily chart. On the flip side, the bulls will be looking to break the 6600 level. That said they might have a job here, especially if it coincides with the S&P testing the top of the Raffs at 3925, as we also have the 25ema here and I would expect a reaction at that.
So, as mentioned keep an eye on 6470, 6450 and 6550 initially, with 6410 and 6600 further out. Have e good weekend and good luck today.
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If you would like more detailed analysis for FTSE 100, 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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FTSE 100 live outlook prediction analysis for 5th February 2021

A“rapid” Covid recovery is likely as Britain's economic prospects are transformed by its record-breaking vaccination drive, Bank of England Governor Andrew Bailey has said. The country's economy will suffer a 4pc in the current quarter as a third lockdown bites, the Bank said - a double-dip recession will be avoided after a smaller autumn hit than feared.

With more than 10m people vaccinated so far, Threadneedle Street expects the current restrictions to be lifted gradually from April and to be largely gone by the autumn, helping output to “recover rapidly towards pre-Covid levels over 2021”.

The boost means the economy will have returned to its pre-pandemic size by 2022, despite a weaker than expected start to this year after a highly infectious mutant strain took hold. This would be a remarkable bounceback after Covid triggered the biggest hit to GDP since at least the First World War.

The central bank lowered its growth forecast for 2021 as a whole to 5pc from November’s 7.25pc, but raised its forecast for 2022 to 7.25pc from 6.25pc.

Negative Rates

Threadneedle Street has given lenders six months to get ready for negative interest rates, but Mr Bailey stressed that these preparations do not mean they will be used. He added: “My message to markets is you really should not try to read the future behavior of the monetary policy committee from the actions we’re taking on our toolbox."

Financial markets took the six-month delay before any such move and the optimistic tone of its forecasts as a positive signal, pushing the pound to its strongest level against the euro since May. The UK’s benchmark cost of borrowing for 10 years rose to its highest level since the outbreak last March.

The monetary policy committee agreed unanimously to keep interest rates at 0.1pc and hold its bond-buying programme steady at £895bn.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks pushed higher Friday after their U.S. peers climbed to a record on signs of a healing labor market and improving coronavirus trends. Treasuries were steady after a widely watched segment of the yield curve steepened to levels last seen in 2015.

Japan and Hong Kong were among markets leading the gains. S&P 500 futures ticked higher after the benchmark closed up more than 1%, led by banks and tech shares, while the Russell 2000 Index of smaller companies climbed 2%. Earnings remained in focus with EBay Inc. and PayPal Holdings Inc. surging on upbeat forecasts. The dollar held an overnight gain. Crude oil advanced and gold steadied after Thursday’s decline.

In Hong Kong, short-video startup Kuaishou Technology surged more than 190% on its debut after one of the city’s biggest initial-public offerings in years.

Global equities are flirting with all-time highs as corporate profits rebound, central banks remain supportive amid the pandemic and as U.S. President Joe Biden tries to fast-track a $1.9 trillion stimulus package. A report Thursday showed U.S. jobless claims fell to the lowest since November, and investor focus now turns to payroll data Friday.

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

The FTSE 100 has certainly been lacking the enthusiasm of its peers this week, hovering around the 6500 level yesterday while the S&P pushed on. The S&P looks like it will be on for a test of the top of the Raff channels on the daily chart, both of which are at the 3925 level for today - ergo a short here is worth a go as we may well see the bears appear here.

For the FTSE 6450 and 6550 are looking like the main levels to watch today. Above the 6550 level then we should get a rise (in theory anyway!) to the 6600 level where we have the 25ema on the daily and also the R2 level for today. Below 6450 then a slide down towards S3 at 6388 looks likely.

That said there is also initial support at the 6491 level where we have the green 2 hour coral line (this held well yesterday with a couple of tests already), and a fib level at 6480, with S1 below that at 6468, and then a better fib at 6463. As such, should we get an initial dip down towards that 6470 level then we may well see a bounce here. Initially it does look like a dip and rise will play out today across the board. The other thing to bear in mind is that we have NFP today, and its Friday! The US may well go for the late Friday buying spree as well.

NFP is forecast at 50k, versus -140k previously, while the unemployment rate is forecast to remain the same at 6.7%. 13:30 this afternoon for the release of that data.

Below 6450 and the bears will be looking to take it down to 6410, and keep the bearish momentum going on the daily chart. On the flip side, the bulls will be looking to break the 6600 level. That said they might have a job here, especially if it coincides with the S&P testing the top of the Raffs at 3925, as we also have the 25ema here and I would expect a reaction at that.

So, as mentioned keep an eye on 6470, 6450 and 6550 initially, with 6410 and 6600 further out. Have e good weekend and 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 FTSE 100, 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 FTSE, DAX, Gold and S&P.
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

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