Quote from Nick on 26th March 2021, 11:35 am

FTSE 100 live outlook prediction analysis for 26th March 2021

Concerns over a potential drag in recovery due to further European lockdowns continued to weigh on markets, with added pressure coming from a retreat in oil prices following the surge on Wednesday. Oil retreated as a potential hit to supply from the ongoing Suez Canal blockage – which lifted prices on Wednesday – was offset by resurfaced worries over European lockdowns. Brent crude fell 3.65pc to $62.06 per barrel.

The FTSE 100 slid into the red, closing 38.06 points lower at 6,674.83, while the FTSE 250 ended down 124.7p at 21,277.84.

In light of the headwinds, energy, travel and leisure stocks dominated the bottom ranks of the indices. Antofagasta fell 64.5p to £16.21 on the blue-chip index, followed by declines in Glencore, as well as oil giants Royal Dutch Shell and BP. FTSE 250 travel operator Tui lost 17.6p to 361p after it cut summer holiday schedules amid the new European restrictions.

The FTSE 100’s key drag was luxury fashion house Burberry as investors feared a Chinese boycott against some retailers’ products after social and state media hit out at a number of international firms over their concerns about forced Uighur labour in the cotton-producing region of Xinjiang.

Some Chinese celebrities have cancelled contracts with brands including H&M and Nike, which have seen share prices fall in Stockholm and New York. It follows Western sanctions imposed on Chinese officials accused of human rights abuses in Xinjiang province.

Biden Takes on China

At his first news conference since becoming U.S. president, Joe Biden promised to outspend China on innovation and infrastructure to help the U.S. retain its place as the world’s most powerful country. He also said he's open to diplomacy with North Korea but warned that recent missile tests could prompt a response if Pyongyang continues. On the domestic front, he promised a new paradigm for America's middle class, set a goalof administering 200 million Covid-19 vaccine doses by the end of April — doubling the existing target for his first 100 days in office — and topped it all off with plans to run for re-election in 2024.

Africa Detour

The big ship is still stuck in the Suez Canal. The Ever Given showed no signs of budging for a third day, forcing other container vessels to weigh costly and time-consuming voyages around Africa that threaten to destabilize the already fragile underpinnings of global trade. A back-of-the-envelope calculation shows there’s about $9.6 billion worth of daily marine traffic halted, with about about 185 vessels waiting to transit the waterway, data compiled by Bloomberg show. A super suction dredger is the new tool being used in the efforts to dislodge the Ever Given.

Market Wrap

Asian stocks look set to climb following U.S. gains, with equity futures pointing higher in Japan, Hong Kong and Australia. Oil reversed its rally as crews intensify efforts to clear the Suez Canal. U.S. equities are again  eying record highs as investors assess progress in the fight against Covid-19 and the risks of inflation as heavy stimulus boosts growth. U.S. data Thursday showed a bigger-than-forecast drop in weekly jobless claims. U.S. 10-year yields rose only slightly after another lackluster auction of seven-year notes, and Bitcoin fell as much as 6.7%, to trade below $53,000.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks rose Friday, tracking U.S. peers as vaccine distribution bolstered economic optimism despite a climb in global Covid-19 cases. Oil was on course for a third week of losses.

A regional share gauge added more than 1%, led by Chinese and Japanese stocks. U.S. and European equity futures pointed higher after the S&P 500 advanced and small-caps rallied, buoyed by President Joe Biden’s doubling of a vaccination target. U.S. banks extended gains in after-hours trading as the Federal Reserve signaled an end to pandemic-era dividend curbs.

Ten-year U.S. Treasury yields rose slightly after another lackluster auction of seven-year notes. The reaction was muted compared with the upheaval in bonds and interest-rate sensitive stocks following poor demand at last month’s sale. The dollar dipped but remained on course for its best week in three.

Crude prices veered back up toward $60 a barrel in a volatile few days of trade as investors weighed the implications of a huge container ship still stuck in the Suez Canal.

Global equities remain just under record highs as investors consider progress in the fight against Covid-19 and the risks of inflation from heavy stimulus. The U.S. recovery looks on track with latest data showing a bigger-than-forecast drop in weekly jobless claims. Federal Reserve Chair Jerome Powell reiterated the U.S. central bank would wait until the economy has “all but fully recovered” to pull back extraordinary monetary support.

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

We finally tested the 6630 support level yesterday and its held well for a 100 point bounce, following a 100 point drop prior to testing it! That level remains the line in the sand for the moment, and the bears will need to break that. Initially the charts are starting bullish today following that bounce with decent looking support at 6685 again, as we have the daily pivot the 30m coral in this area. Just below this we have the 2h support at 6670.

Should the bears push lower though then 6642 is the key fib, 6637 for S1, and then yesterdays low at 6615 are the cluster of next supports. I am thinking that the higher support level will hold though at the 6680 today, though the ramifications of the Suez Canal being blocked are getting a bit more serious now and some ships have started diverting taking the longer route. Supply chains are going to be impacted for a while thats for sure.

If we do get a drop going and we break the 6680 level then I have put another long in the trade plan just in case at yesterday's low level, as we may well see another defence of that.

Bear in mind though that being a Friday its usually odd! Lower stakes can be worth doing.

For the bulls they will be looking to break the 6730 level and if they manage that then we should see a rise towards the top of the 10 day Raff channel and maybe just a bit higher, as we have daily resistance at 6785. Above this the R2 level is 6798, with 6815 above that and the bulls may struggle around here.

The top of the 10 day Raff on the S&P is now at 3951 and we may well see the bulls struggle a bit here. But after the rise from 3855 yesterday the 2 hour chart is bullish, with support at 3898 - as such a dip to this level is worth going long on.

Good luck today and have a great weekend.

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