Quote from Nick on 21st May 2021, 9:52 am

FTSE 100 live outlook prediction analysis for 21st May 2021

London’s markets rebounded on Thursday, eventually setting aside concerns on Wednesday over cryptocurrency volatility and inflation despite a choppy start to trading. Having fallen back below the 7,000 mark, the FTSE 100 added 69.5 points to close at 7,019.7.

Meanwhile, sterling rose against the dollar as it benefited from optimism on the strongest factory orders since late 2018. The pound rose 0.2pc to $1.418 and was up 0.15pc against the euro at €1.160.

The optimism extended to industrial stocks, with the wider industrial index adding 2.4pc to help lift blue chips.

Separately, the price of oil slipped for the third consecutive day amid speculation that sanctions could be eased against Iran, resulting in an increase in oil supply from the region as well as over the continued impact of the coronavirus on demand.

Brent crude decreased 2.3pc to settle at $65.11 a barrel after struggling to sustain the $70 level it briefly topped earlier this week.

Global Floor

The U.S. has proposed that countries agree to a 15% global minimum corporate tax in international negotiations aimed at ending competition to lure companies through cheap rates. The offer, which came in talks held this week, moves the U.S. position closer to the 12.5% rate that had been discussed at the OECD. Lower-tax countries such as Ireland had been skeptical of the U.S.’s proposed 21% rate, and U.K. officials also worry that the rate is too high for the long term. Here’s an explainer on the global tax proposal, which columnist David Fickling says would be as much of a shock to international economic order as Trump’s trade war with China.

Tech Rebound

Asian stocks look set to climb Friday after technology companies led a Wall Street rebound on economic optimism and easing concern about a scale back of U.S. stimulus. Futures were in the green in Japan, Australia and Hong Kong. Treasury yields and the dollar fell. Gold is around the highest price in more than four months. Oil prices dropped to the lowest in nearly a month as traders assessed the likelihood of a renewed nuclear deal with Iran.[Bloomberg]

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US & Asia Overnight from Bloomberg

Asian stocks were steady Friday after a Wall Street rebound as traders weighed the economic recovery from the pandemic as well as the possibility of reduced U.S. stimulus. The dollar held a decline.

Shares rose in Japan but slipped in China and Hong Kong, where Tencent Holdings Ltd. slid after pledging a sharp boost in investment. European and U.S. equity contracts were modestly in the green after the S&P 500 pushed higher and the Nasdaq 100 rallied past its 50-day moving average. A drop in U.S. initial jobless claims put the focus back on the economic recovery, but there are lingering fears price pressures imperil loose financial conditions.

Treasury yields maintained a retreat. Weaker-than-expected demand for an auction of 10-year inflation-protected debt suggested confidence in the Federal Reserve’s narrative that the recent acceleration in inflation is unlikely to be sustained. A pause in this year’s commodity boom continued.

Gold is around the highest level in more than four months. Its claimed virtual rival, Bitcoin, steadied after a volatile cryptocurrency slump this week.

The global economic revival, the risk of a significant pickup in inflation and Covid-19 flareups in some parts of the world continue to shape market moves. For now, growth optimism is a bulwark for investors. At the same time, the latest Fed minutes flagged the possibility of a debate at some point on scaling back the exceptional stimulus that’s bolstered a variety of assets.

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

We got a fake break below the 6950 support yesterday before the bulls fought back (getting a lot of these fake breaks recently, across the board) and a rise back above 7000. That is now the 2 hour support as well so the bulls will be keen to defend the 7000 level this morning, otherwise we are likely to slide down to 6950 again where we have S1 and the key fib (and another fake break probably!)

Below 6950 then the bottom of the 20d Raff at 6853 is likely to be on the bears radar, and in fact we also have S3 for today here, though I am not expecting it to get that low. The ASX200 session saw a dip and then a slow bounce and I am thinking that we will have a s similar pattern, especially if the 7000 level holds. I am also looking at key support at 4130 on the 2h S&P chart at the moment and I think the US bulls will be keen to defend this level. Thats is both the Hull moving average and the coral line there. 4136 is the 30m 200ema.

Above the initial resistance level of 7033 which is the overnight high then key fib is at 7045 initially, with 7062 R1 above that. We also have the cam break out at 7070 and daily resistance at 7075 so I am expecting a bit of a stutter in this area later today.

We have option expiry today so expect a bit of volatility at 10:10 this morning as the various futures contracts roll over.

The FTSE 100 daily chart remains bullish with the Raff channels heading up still, so there may well be a bit more fuel left in the bulls tank for a push to a bit higher yet - 4220 S&P maybe and 7250 FTSE - before a more significant turn prior to the summer.

Gold continues to push on as well and looks to still be on track for a test of the $1900 level. Initial support from the daily pivot today at 1875 with 1865 below that for the 200ema and the S1 level. We have tracked the green 2h coral well on that recently with this move upwards. The bulls need to break 1884 today.

So, picture remains bullish still, buy the dips still playing out well. Good luck today and have a great weekend.

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