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Its Fed Day 75bp rise priced in | 7364 7425 resistance | 7300 7280 7240 support

#1 · 27th July 2022, 9:21 am

Quote from Nick on 27th July 2022, 9:21 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE100 was subdued Tuesday as worries about an energy crisis in the continent and a weakness in British retail and banking stocks offset gains in commodity-linked stocks and an upbeat sales forecast from Unilever. The blue-chip index was flat at close after rising as much as 0.8pc in early trading, with oil major Shell and miner Glencore among the top boosts as commodity prices climbed on the back of a softening dollar. Unilever jumped 2.9pc after it raised its full-year sales guidance as it hiked prices to counter soaring costs.
US equity futures rallied Wednesday after resilient earnings from Google parent Alphabet Inc. and an upbeat outlook from Microsoft Corp. helped alleviate some of the wider caution in markets.
Contracts on the tech-heavy Nasdaq 100 added over 1%, while S&P 500 futures were up more than 0.5%. Microsoft jumped in extended trading on a strong sales forecast, while Alphabet’s revenues assuaged investors’ worst fears.
Better-than-expected results at Microsoft and Google helped soothe a nervous mood in stock markets on Wednesday, while a cut in Russian gas flow dragged on the euro and a Federal Reserve meeting due later in the day kept bonds and the dollar on edge.
Nasdaq 100 futures bounced 1.4% and S&P 500 futures were up 0.8% in Asia after Microsoft forecast steep revenue growth and Google parent Alphabet posted strong search engine ad sales.
Alphabet shares rose 5% after hours and Microsoft shares rose 4% to cut through some of the gloom cast over Tuesday by a profit warning at retailer Walmart and some soft U.S economic data.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% and Japan’s Nikkei fell 0.3%.
The Federal Reserve is expected to announce a 75 basis point rate hike at 1800 GMT but investors are wary of a surprise in either direction and have preferred safe assets such as dollars.
In the United States a 75 bp hike is fully priced on Wednesday, but futures imply about a 15% chance of a 100 bp hike. The Treasury market is already anticipating that near-term hikes will hurt longer-run growth.
On top of worries about interest rates damaging economies, Europe faces an energy crisis and China is beset by restrictive COVID-19 policies and fresh fears of a property market collapse.
The euro had its worst session in a fortnight on Tuesday, sliding 1%, as Russia’s Gazprom said it would further cut westbound gas flow and energy prices zoomed higher.
FTSE100 live outlook prediction analysis for 27th July 2022
The big event today is the Fed this evening and the rate increase. A 75bp hike is priced in currently, so we should see further upside if that get delivered, while there is a 15% chance of a 100bp rise. That would likely upset markets a bit.
Initially we may well see a rise towards the 7365 R1 level and double top with the high from yesterday. If the bulls stall there then we should get a drop down to the 7300 support level, with the 30m 200ema here - the line we bounced off yesterday. The daily chart remains positive as well with 7428 support from the 25ema, so should we drop as low as that then a bounce here would make sense. That may also tally with the S&P dropping down to the daily support at 3900 as well.
Above the 7365 level then the bulls will be aiming for that daily resistance level at 7425 and with R2 at 7407 today we could wee see that. Maybe a buy the rumour, sell the news later sort of day as the Fed isn't until 7pm. R3 for today is at 7447. The Raff channels are both still heading up as well, so the bulls still have the momentum for the moment.
For the bears 7300 as mentioned is the first key support, and should they break that then a drop down towards 7280 would likely happen pretty easily, with the S1 and key fib here. 7240 is S2 and tally with that daily support mentioned above.
S&P500
The bulls are also fighting back here, and the daily chart looks bullish with the 3900 level locked in as support, ready for an assault on 4000+. To start with the 30m chart is bullish with 3936 as support and a long here on any initial dip would be good and should see a bounce here. A climb then towards the 3980 level, and hopefully higher! The 2h chart however is bearish, and the bulls will need to break 3980 as we have the red coral here. 3970 is the Hull MA though not the first test. Again, a dip and rise ahead of the Fed and possibly sell the news this evening.
Continued choppy, trappy trading for the moment so stay nimble. Good luck today.
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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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Daily Analysis pre market open (sent around 7am each day) for FTSE100, DAX40, Gold and S&P500.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

The FTSE100 was subdued Tuesday as worries about an energy crisis in the continent and a weakness in British retail and banking stocks offset gains in commodity-linked stocks and an upbeat sales forecast from Unilever. The blue-chip index was flat at close after rising as much as 0.8pc in early trading, with oil major Shell and miner Glencore among the top boosts as commodity prices climbed on the back of a softening dollar. Unilever jumped 2.9pc after it raised its full-year sales guidance as it hiked prices to counter soaring costs.

US equity futures rallied Wednesday after resilient earnings from Google parent Alphabet Inc. and an upbeat outlook from Microsoft Corp. helped alleviate some of the wider caution in markets.

Contracts on the tech-heavy Nasdaq 100 added over 1%, while S&P 500 futures were up more than 0.5%. Microsoft jumped in extended trading on a strong sales forecast, while Alphabet’s revenues assuaged investors’ worst fears.

Better-than-expected results at Microsoft and Google helped soothe a nervous mood in stock markets on Wednesday, while a cut in Russian gas flow dragged on the euro and a Federal Reserve meeting due later in the day kept bonds and the dollar on edge.

Nasdaq 100 futures bounced 1.4% and S&P 500 futures were up 0.8% in Asia after Microsoft forecast steep revenue growth and Google parent Alphabet posted strong search engine ad sales.

Alphabet shares rose 5% after hours and Microsoft shares rose 4% to cut through some of the gloom cast over Tuesday by a profit warning at retailer Walmart and some soft U.S economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% and Japan’s Nikkei fell 0.3%.

The Federal Reserve is expected to announce a 75 basis point rate hike at 1800 GMT but investors are wary of a surprise in either direction and have preferred safe assets such as dollars.

In the United States a 75 bp hike is fully priced on Wednesday, but futures imply about a 15% chance of a 100 bp hike. The Treasury market is already anticipating that near-term hikes will hurt longer-run growth.

On top of worries about interest rates damaging economies, Europe faces an energy crisis and China is beset by restrictive COVID-19 policies and fresh fears of a property market collapse.

The euro had its worst session in a fortnight on Tuesday, sliding 1%, as Russia’s Gazprom said it would further cut westbound gas flow and energy prices zoomed higher.

FTSE100 live outlook prediction analysis for 27th July 2022

The big event today is the Fed this evening and the rate increase. A 75bp hike is priced in currently, so we should see further upside if that get delivered, while there is a 15% chance of a 100bp rise. That would likely upset markets a bit.

Initially we may well see a rise towards the 7365 R1 level and double top with the high from yesterday. If the bulls stall there then we should get a drop down to the 7300 support level, with the 30m 200ema here - the line we bounced off yesterday. The daily chart remains positive as well with 7428 support from the 25ema, so should we drop as low as that then a bounce here would make sense. That may also tally with the S&P dropping down to the daily support at 3900 as well.

Above the 7365 level then the bulls will be aiming for that daily resistance level at 7425 and with R2 at 7407 today we could wee see that. Maybe a buy the rumour, sell the news later sort of day as the Fed isn't until 7pm. R3 for today is at 7447. The Raff channels are both still heading up as well, so the bulls still have the momentum for the moment.

For the bears 7300 as mentioned is the first key support, and should they break that then a drop down towards 7280 would likely happen pretty easily, with the S1 and key fib here. 7240 is S2 and tally with that daily support mentioned above.

S&P500
The bulls are also fighting back here, and the daily chart looks bullish with the 3900 level locked in as support, ready for an assault on 4000+. To start with the 30m chart is bullish with 3936 as support and a long here on any initial dip would be good and should see a bounce here. A climb then towards the 3980 level, and hopefully higher! The 2h chart however is bearish, and the bulls will need to break 3980 as we have the red coral here. 3970 is the Hull MA though not the first test. Again, a dip and rise ahead of the Fed and possibly sell the news this evening.

Continued choppy, trappy trading for the moment so stay nimble. 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