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NFP Today with 25k forecasted | 7057 7160 resistance | 6957 6923 support

#1 · 7th October 2022, 9:01 am

Quote from Nick on 7th October 2022, 9:01 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Stocks in Asia slipped as traders digested disappointing earnings from chipmakers that may foreshadow a wider decline in corporate profits. Uncertainty also increased ahead of US monthly payrolls data. Asian stocks declined on Friday, extending a global equity slide to a third day, as investors fretted over recession risks amid signs of further aggressive central bank policy tightening.
The MSCI Asia Pacific Index dropped for the first time in four days, with tech shares the biggest losers. Samsung Electronics Co. reported a decline in profit for the first time since late 2019, underscoring the depth of a global PC and memory-chip downturn. Advanced Micro Devices Inc. slid in late US trading after worse-than-expected preliminary results.
The pound has slumped further against the dollar as concern over the Government’s tax-cutting fiscal plans continue to grip markets. Sterling extended its losses during another torrid day for the currency, tumbling more than 1pc to trade below $1.12.
While Liz Truss’s reversal of plans to abolish the top rate of income tax and the Bank of England’s £65bn intervention in bond markets have helped to calm last week’s turmoil, investors remain on edge about the outlook for the UK.
Deutsche Bank warned Britain won’t recover to pre-pandemic levels by 2024 and will only get back to its trend growth rate of 1.25pc by the middle of the decade.
European shares tumbled on Thursday as newly-published minutes from the European Central Bank's last meeting fanned fears about the state of inflation in the eurozone and aggressive policy moves to tame it. The pan-European STOXX 600 index reversed early session gains and was down 0.6pc, extending losses to a second straight session.
The dollar and Treasury yields remained elevated after multiple Federal Reserve officials continued to talk up additional rate hikes ahead of a crucial U.S. jobs report later in the day, while rising crude oil prices compounded concerns about prolonged inflation.
Japan’s Nikkei dropped 0.7% as of 0130 GMT, pulling back from a two-week high reached on Thursday. South Korea’s Kospi slipped 0.33%, weighed partly by a decline in Samsung Electronics shares, after the technology giant flagged a worse-than-expected 32% drop in quarterly operating earnings. Australia’s stock benchmark retreated 0.59%.
Hong Kong’s Hang Seng was 1.17% lower in early trade, with its tech stocks tumbling 2.32%. Mainland shares remain closed for the final day of the Golden Week holiday.
MSCI’s broadest index of Asia-Pacific shares declined 0.85%.
Meanwhile, U.S. emini S&P500 futures pointed 0.12% lower, after the index dropped 1% overnight.
Fed officials showed no intention of backing down from the most aggressive rate hike campaign in decades, with Fed Governor Lisa Cook, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari all emphasising that the inflation fight was ongoing and they were not prepared to change course.
Stocks started the week on a strong footing, with the MSCI world equity index rallying 5.65% in the first two days amid speculation that the pace of central bank tightening might slow, but that has fizzled out since Wednesday.
Markets currently price an 85.5% chance of a 75 basis point increase for next month’s Federal Open Market Committee meeting, and 14.5% odds for a half point bump.
Investors will now be looking to Friday’s non-farm payrolls report for some clarity as to whether a steady diet of rate hikes has begun to take a bite out of hiring and wage inflation.
FTSE100 live outlook prediction analysis for 7th October 2022
The 7105 resistance level first thing yesterday proved to be the line in the sand and the bears took the price a lot lower yesterday as fears came back to the fore. However, we have NFP today, and along with a usual Friday warning, keep your guard up today. The NFP forecast is 250k versus 315k previously, along with unemployment forecasted to be 3.7% again. That news is out at 1330, so we may well see a "buy the rumour, sell the news" session till then.
Initially it looks like we may see a rise from this 6990 level up towards the daily pivot at the 7014, and possibly all the way to the key fib at 7057. That also ties in with a test of the now bearish 2h resistance at 7061 so should we see this level then a short here looks to be worth a go.
Above the 7060 level then the bulls would need to break the very close R1 level of 7069, and we also have the top of the 20d Raff channel at 7076. Might be a big ask for a Friday though. But an NFP Friday can always surprise, and we may well see a US pump later this evening. Above this level then 7100 round number would be of note, with 7120 and 7140 daily resistance above that.
For the bears, they would be looking to move this below 7000 and a test of the key fib at 6957 looks possible. That ties in with yesterday's low, at 6960 as well, so a break of this would get things bearish again, with 6924 S1 the next level of note. Below that then S2 at 6862 would come into play as well, though I am not expecting it to get that bearish today, unless NFP really plays havoc with the markets..... Or the UK government!
The S&P500 looks like it should rise towards the 3780 level where we have R1 and the key fib, and just below its 2h resistance at 3793. A rise and dip on this would also make sense. The bears will be looking to break 3726 as that would likely see 3707 S1 and a level that we may well bounce at.
Not too much more to say really, once again keep an eye on the key levels and remember NFP at 13:30.
Have a great weekend!
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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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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

Stocks in Asia slipped as traders digested disappointing earnings from chipmakers that may foreshadow a wider decline in corporate profits. Uncertainty also increased ahead of US monthly payrolls data. Asian stocks declined on Friday, extending a global equity slide to a third day, as investors fretted over recession risks amid signs of further aggressive central bank policy tightening.

The MSCI Asia Pacific Index dropped for the first time in four days, with tech shares the biggest losers. Samsung Electronics Co. reported a decline in profit for the first time since late 2019, underscoring the depth of a global PC and memory-chip downturn. Advanced Micro Devices Inc. slid in late US trading after worse-than-expected preliminary results.

The pound has slumped further against the dollar as concern over the Government’s tax-cutting fiscal plans continue to grip markets. Sterling extended its losses during another torrid day for the currency, tumbling more than 1pc to trade below $1.12.

While Liz Truss’s reversal of plans to abolish the top rate of income tax and the Bank of England’s £65bn intervention in bond markets have helped to calm last week’s turmoil, investors remain on edge about the outlook for the UK.

Deutsche Bank warned Britain won’t recover to pre-pandemic levels by 2024 and will only get back to its trend growth rate of 1.25pc by the middle of the decade.

European shares tumbled on Thursday as newly-published minutes from the European Central Bank's last meeting fanned fears about the state of inflation in the eurozone and aggressive policy moves to tame it. The pan-European STOXX 600 index reversed early session gains and was down 0.6pc, extending losses to a second straight session.

The dollar and Treasury yields remained elevated after multiple Federal Reserve officials continued to talk up additional rate hikes ahead of a crucial U.S. jobs report later in the day, while rising crude oil prices compounded concerns about prolonged inflation.

Japan’s Nikkei dropped 0.7% as of 0130 GMT, pulling back from a two-week high reached on Thursday. South Korea’s Kospi slipped 0.33%, weighed partly by a decline in Samsung Electronics shares, after the technology giant flagged a worse-than-expected 32% drop in quarterly operating earnings. Australia’s stock benchmark retreated 0.59%.

Hong Kong’s Hang Seng was 1.17% lower in early trade, with its tech stocks tumbling 2.32%. Mainland shares remain closed for the final day of the Golden Week holiday.

MSCI’s broadest index of Asia-Pacific shares declined 0.85%.

Meanwhile, U.S. emini S&P500 futures pointed 0.12% lower, after the index dropped 1% overnight.

Fed officials showed no intention of backing down from the most aggressive rate hike campaign in decades, with Fed Governor Lisa Cook, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari all emphasising that the inflation fight was ongoing and they were not prepared to change course.

Stocks started the week on a strong footing, with the MSCI world equity index rallying 5.65% in the first two days amid speculation that the pace of central bank tightening might slow, but that has fizzled out since Wednesday.

Markets currently price an 85.5% chance of a 75 basis point increase for next month’s Federal Open Market Committee meeting, and 14.5% odds for a half point bump.

Investors will now be looking to Friday’s non-farm payrolls report for some clarity as to whether a steady diet of rate hikes has begun to take a bite out of hiring and wage inflation.

FTSE100 live outlook prediction analysis for 7th October 2022

The 7105 resistance level first thing yesterday proved to be the line in the sand and the bears took the price a lot lower yesterday as fears came back to the fore. However, we have NFP today, and along with a usual Friday warning, keep your guard up today. The NFP forecast is 250k versus 315k previously, along with unemployment forecasted to be 3.7% again. That news is out at 1330, so we may well see a "buy the rumour, sell the news" session till then.

Initially it looks like we may see a rise from this 6990 level up towards the daily pivot at the 7014, and possibly all the way to the key fib at 7057. That also ties in with a test of the now bearish 2h resistance at 7061 so should we see this level then a short here looks to be worth a go.

Above the 7060 level then the bulls would need to break the very close R1 level of 7069, and we also have the top of the 20d Raff channel at 7076. Might be a big ask for a Friday though. But an NFP Friday can always surprise, and we may well see a US pump later this evening. Above this level then 7100 round number would be of note, with 7120 and 7140 daily resistance above that.

For the bears, they would be looking to move this below 7000 and a test of the key fib at 6957 looks possible. That ties in with yesterday's low, at 6960 as well, so a break of this would get things bearish again, with 6924 S1 the next level of note. Below that then S2 at 6862 would come into play as well, though I am not expecting it to get that bearish today, unless NFP really plays havoc with the markets..... Or the UK government!

The S&P500 looks like it should rise towards the 3780 level where we have R1 and the key fib, and just below its 2h resistance at 3793. A rise and dip on this would also make sense. The bears will be looking to break 3726 as that would likely see 3707 S1 and a level that we may well bounce at.

Not too much more to say really, once again keep an eye on the key levels and remember NFP at 13:30.

Have a great weekend!

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