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New month money for a rise and dip | 7176 7195 7220 resistance | 7120 7077 support

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

Business confidence has risen to its highest level in more than four years as looser Covid restrictions allow the economy to recover from the pandemic.

British companies are also more optimistic about what is in store for the economy over the next 12 months, with a record number planning to increase salaries, according to the Lloyds Bank Business Barometer survey. Meanwhile, price rises are starting to bite for UK consumers amid rising commodity prices, a rise in shipping costs and Brexit red tape.

The FTSE100 dropped steadily, breaking the 7147 support level to drop down further and test the 7095 daily support which held. Overnight we have climbed back on the spectre of the new month. The drop came despite the rise in business confidence, with month end profit taking and a drop off in the US markets, having reached the heady heights of 4545 on the S&P500. U.S. stocks dropped back from all-time highs amid some mixed data, including a drop in consumer confidence to a six-month low and a record jump in home prices.

FTSE 100 live outlook prediction analysis for 1st September 2021

The bears took it down yesterday however we have the start of the new month to help the bulls, and with 7095 daily support holding, the buying started a bit earlier yesterday. As such we should get an initial kick up first thing this morning and a likely test of the R1 and key fib at 7176. We could then see a stutter here but the 30 min chart is looking bullish to start with and has decent support at the 7120-7130 area so a long here (buy the dip!) should work well.

The 30m coral has now also gone green again showing a bullish trend and 7121 is support from that. If the bulls can defend that then we may well see a rise today to retest yesterdays high at 7178, but also more significantly a test of the 7200 area where we have the next daily resistance. Talking of bullishness, the S&P dip has also been bought up and a rise on that towards, ultimately, the 4573 R3 level today would fit well, if the bulls can break the recent high.

Following the dip across the board yesterday the 2h charts are actually bearish to start with today however the new month money pump may well see us pop through the resistance levels and in fact that has already started overnight. 7147 on the FTSE, 4533 S&P, and 15856 Dax have all been broken.

If the bulls manage to break the 7200 level then R2 at 7220 is next up and again another decent high level. If the bulls were to really go for it today, then the R3 level and top of the 10d Raff channel is at 7270, along with the 20 day channel top at 7282. That area feels a big ask for today but you never know.

If the bears on the other hand were to break 7120 then 7078 looks to be the next key level as we have the key fib here, along with the S1 level at 7086. A really bearish day and we then have S2 at 7044. I don't think it will be that negative today though as I am expecting the S&P to continue to rise towards the 4570 area. The bulls remain in control for the moment. US jobs report on Friday may change that though!

So generally looks bullish for today but stay nimble, and good luck.

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Asian Session

Asian stocks rose Wednesday as traders assessed the global recovery’s resilience to the delta virus variant and the outlook for central bank stimulus. Yields on U.S., Australian and New Zealand sovereign debt climbed.

MSCI Inc.’s Asia-Pacific gauge hit the highest level in more than a month, bolstered by Japan and a continuing rebound in Chinese technology stocks on bets that the worst of Beijing’s regulatory clampdown may have passed.

S&P 500, Nasdaq 100 and European futures were in the green. U.S. stocks edged back overnight from a record amid mixed data, including weaker consumer confidence and a jump in home prices.

Treasuries declined, as did government bonds from Australia and New Zealand. Hawkish comments from some European Central Bank officials had put the spotlight on the prospect of a reduction in monetary-policy support as economies recover from the pandemic.

Global equities are hovering around record levels, illustrating faith in the durability of the recovery from the pandemic. But one question is whether the pace of that rebound is peaking due to the prospect of less expansive stimulus and the spread of the delta strain. The latest Asian purchasing managers’ indexes signaled either a contraction or moderation in manufacturing. [Bloomberg]

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