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FTSE defends 7010 overnight | Holds up despite US sell off | 7082 7111 7130 resistance | 7030 7010 6987 support

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

The FTSE 100 closed lower yesterday but crucially held the 7010 support after the bell, dragged down by heavyweight homebuilders and financial stocks. The blue-chip index fell 0.5pc to 7,028 points as concerns about inflation linger.

Higher costs and supply chain disruptions have recently pushed central banks to adopt a more hawkish tone, with Bank of England Governor Andrew Bailey hinting that the case for higher interest rates is building.

The wider homebuilder index fell 3pc, hitting its lowest level in more than two months. Taylor Wimpey, Bellway and Countryside Properties were down between 2.7pc and 4pc.

Meanwhile, the FTSE 250 fell  1.7pc, recording its worst session in over two months, with travel and leisure stocks among the top losers.

U.S. Democrats hit a wall in their high-stakes effort to simultaneously avert a government shutdown, avoid a debt default and advance President Joe Biden’s $4 trillion agenda, as feuding gripped lawmakers. Meanwhile, Democratic Senator Elizabeth Warren said that she denounced Fed Reserve Chair Jerome Powell to his face as “ a dangerous man,” because he was making it too easy for big banks to take big risks. In the Senate, Republicans for the second time in as many days blocked a Democratic move to raise the federal debt limit, escalating risk less than three weeks before the U.S. Treasury potentially runs out of capacity to avert a federal payments default. They are trying to force Biden to abandon his $3.5 trillion domestic spending bill.

FTSE 100 live outlook prediction analysis for 29th September 2021

It was good to see the 7011 support area hold yesterday and should we see that level again today in hours it may well hold again. If the S&P can build on its overnight bounce from the 4345 level then we may well see the worm start to turn and the bulls gain a bit of strength IF they can break above the 4415 level. Likewise, the FTSE100 bulls will need to break above the 7082 level, as we now have a red 2h coral here, as well as the key fib resistance for today.

If they manage to do so then we may well see a rise back towards the 7130 level and possibly a test of the top of the 20 day Raff channel, currently at 7200 but dropping. Seems a big ask for the moment though and any whiff of weakness will see the bears come back to the fore.

Worth remembering that this is all seasonal - September is notoriously bearish generally and more volatile after the quiet summer period - and that seasonality also manifests into a stronger year end. Good time to get all the bad news out!

Zooming in a bit, above the 7082 level then R2 at 7111 would likely see a reaction, prior to any test of the recent high at 7131. It would certainly strengthen the bulls if they push past the 7082, and it was actually quite positive for them yesterday in that the FTSE100 was actually quite resilient while the US sold off, and held above 7000.

For the bears, they will be looking to break below 7030 to start with as we are currently above the 30m coral here, and this is the level from that, though its still red (shows downtrend). If they do then 7011 is next up as 7010 ws the low yesterday after the bell. Below that then the key fib support is at 6988 and just below S1 at 6994. If it gets very bearish again today then S2 at 6965 would be next up and we could see a slide on the S&P down to S1 at 4320.

The 2h S&P500 chart is quite bearish still and has a red coral at 4433 currently, as does the Dax chart at 15569. Should we see these levels then worth a short here.

In summary, watching the 7010 level once again, with 6988 below that. Majorly bearish and a slide to 6930 could happen. Resistance level is 7082 to watch first up, with 7111 and 7131 above that. Good luck today.

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