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NI Rise kicks in | Fed plans to pare balance sheet | 7541 7520 7491 support | 7600 7625 7660 resistance

#1 · 7th April 2022, 9:30 am

Quote from Nick on 7th April 2022, 9:30 am
FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 closed in the red Wednesday as the National Insurance rise kicked in, worsening Britain's cost-of-living crisis as domestic energy bills rocket. London's leading index shed 0.3% to 7,587.
Stocks fell Thursday after the Federal Reserve outlined plans to pare its balance sheet by more than $1 trillion a year while hiking interest rates, a campaign to curb inflation that could hit economic growth.
An Asia-Pacific share gauge fell over 1%, sapped by Japan. Losses were a little smaller in China, where officials have again signaled that they intend to loosen policy amid a Covid outbreak and property-market woes. U.S. and European futures dipped after a tech-led Wall Street retreat Wednesday.
Treasuries rose, the yield curve was steeper and the dollar flirted with a three-week high as investors digested the minutes of the Fed’s March meeting.
The minutes signaled half-point rate increases are possible, and that the Fed is considering reducing its massive bond holdings at a maximum pace of $95 billion a month to tighten financial conditions.
Commodity markets continue to be whipsawed by disruptions sparked by Russia’s war in Ukraine and efforts to curb raw-material costs. Oil rallied, paring a slump that was triggered by the International Energy Agency’s decision to deploy 60 million barrels from emergency stockpiles.
Sanctions
The UK has slapped sanctions on Russia’s largest bank and pledged to end oil and coal imports in the latest escalation of measures against Moscow. The Government announced a total asset freeze on Sberbank and Credit Bank of Moscow in an effort to “starve Putin’s war machine”.
The ban on coal and gas will come into effect by the end of 2022, while imports of gas will end “as soon as possible thereafter”.
Fighting Inflation
Federal Reserve officials laid out a long-awaited plan to shrink their balance sheet by more than $1 trillion a year while raising interest rates “expeditiously” to counter the hottest inflation in four decades. The roadmap for reducing the assets they bought during the pandemic was spelled out on Wednesday in minutes of their March meeting. The record showed a lot of support among the 16 officials who took part for raising rates by 50 basis points. Tech stocks sank the most in a month and Treasuries fell across the curve.
FTSE 100 live outlook prediction analysis for 6th April 2022
Somewhat annoying to have the Dax miss that short order by 2 points to then drop 400! The FTSE has remained pretty resilient though, with the bulls defending that drop down to the 7550 support level, though the overshoot to 7533 was a bit suspect. Overnight its held up well again and I wouldn't be surprised to see another assault on the 7620 resistance level shortly.
That said, there is initial resistance to start with at the daily pivot level of 7578 and also the red 30m coral here that kicked in yesterday. We may therefore see an initial drop down towards the S1 level at 7541, and possibly the key fib at 7520. The 7540 area is also the bottom of the 10day Raff channel and would be the first test of that in a while so should see a reaction (though a possible overshoot as well, as per yesterday little antics on the FTSE100). Both Raff channels continue to head up.
Above the 7625 level where we have the R1 and key fib resistance, the bulls will be looking at R2 at 7660, though the daily resistance level at 7732 comes back into play as well. The FTSE100 continues to look bullish while the others are less so!
For the bears, they will be looking to break that 7520 level as that will allow a drop down to the 25ema on the daily at 7465 which I have been keeping an eye on for a while now. I would like to see a bounce around here, and its a possible swing long spot to ride some more of the seasonally bullish April.
S&P500
Looks bearish and shorting the rallies to the 4500 level looks like it may be good today. We have the Hull MA on the 2h at 4500, and then the key fib at 4509. The bulls will be keen to defend any initial drop though and the key fib support at the 4450 level may well hold, at least itnailly. We also have the bottom of the 20d Raff channel being tested at 4458 as I write this. The bottom of the 10d Raff channel is at the 4413 level where we also have the 200ema on the daily - so should get a test this low then again a swing long here is worth a go. The daily chart has given a buy signal already though at the 4471 level so will be interesting to see if we climb from here.
Dax40
Nice drop off the 2h Hull MA yesterday at the 14440 level (well just below, funny that) and the daily chart is just starting to go bearish as well. Germany have been a bit scuppered after their over-reliance on Russian O&G which is feeding through to the market. That said, they will be keen to defend the S1 level at 13969 today and try and keep the Dax above the 14000 level. The bulls would need to break the 14340 level now though as we are just going bearish on the daily with that as resistance. I am looking for a rise towards the 14291 key fib level today though and that may well align with the 200ema on the 30m as well which is declining, though at 14340 currently.
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 FTSE 100, 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 FTSE, DAX, Gold and S&P.
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

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

The FTSE 100 closed in the red Wednesday as the National Insurance rise kicked in, worsening Britain's cost-of-living crisis as domestic energy bills rocket. London's leading index shed 0.3% to 7,587.

Stocks fell Thursday after the Federal Reserve outlined plans to pare its balance sheet by more than $1 trillion a year while hiking interest rates, a campaign to curb inflation that could hit economic growth.

An Asia-Pacific share gauge fell over 1%, sapped by Japan. Losses were a little smaller in China, where officials have again signaled that they intend to loosen policy amid a Covid outbreak and property-market woes. U.S. and European futures dipped after a tech-led Wall Street retreat Wednesday.

Treasuries rose, the yield curve was steeper and the dollar flirted with a three-week high as investors digested the minutes of the Fed’s March meeting.

The minutes signaled half-point rate increases are possible, and that the Fed is considering reducing its massive bond holdings at a maximum pace of $95 billion a month to tighten financial conditions.

Commodity markets continue to be whipsawed by disruptions sparked by Russia’s war in Ukraine and efforts to curb raw-material costs. Oil rallied, paring a slump that was triggered by the International Energy Agency’s decision to deploy 60 million barrels from emergency stockpiles.

Sanctions
The UK has slapped sanctions on Russia’s largest bank and pledged to end oil and coal imports in the latest escalation of measures against Moscow. The Government announced a total asset freeze on Sberbank and Credit Bank of Moscow in an effort to “starve Putin’s war machine”.

The ban on coal and gas will come into effect by the end of 2022, while imports of gas will end “as soon as possible thereafter”.

Fighting Inflation
Federal Reserve officials laid out a long-awaited plan to shrink their balance sheet by more than $1 trillion a year while raising interest rates “expeditiously” to counter the hottest inflation in four decades. The roadmap for reducing the assets they bought during the pandemic was spelled out on Wednesday in minutes of their March meeting. The record showed a lot of support among the 16 officials who took part for raising rates by 50 basis points. Tech stocks sank the most in a month and Treasuries fell across the curve.

FTSE 100 live outlook prediction analysis for 6th April 2022

Somewhat annoying to have the Dax miss that short order by 2 points to then drop 400! The FTSE has remained pretty resilient though, with the bulls defending that drop down to the 7550 support level, though the overshoot to 7533 was a bit suspect. Overnight its held up well again and I wouldn't be surprised to see another assault on the 7620 resistance level shortly.

That said, there is initial resistance to start with at the daily pivot level of 7578 and also the red 30m coral here that kicked in yesterday. We may therefore see an initial drop down towards the S1 level at 7541, and possibly the key fib at 7520. The 7540 area is also the bottom of the 10day Raff channel and would be the first test of that in a while so should see a reaction (though a possible overshoot as well, as per yesterday little antics on the FTSE100). Both Raff channels continue to head up.

Above the 7625 level where we have the R1 and key fib resistance, the bulls will be looking at R2 at 7660, though the daily resistance level at 7732 comes back into play as well. The FTSE100 continues to look bullish while the others are less so!

For the bears, they will be looking to break that 7520 level as that will allow a drop down to the 25ema on the daily at 7465 which I have been keeping an eye on for a while now. I would like to see a bounce around here, and its a possible swing long spot to ride some more of the seasonally bullish April.

S&P500
Looks bearish and shorting the rallies to the 4500 level looks like it may be good today. We have the Hull MA on the 2h at 4500, and then the key fib at 4509. The bulls will be keen to defend any initial drop though and the key fib support at the 4450 level may well hold, at least itnailly. We also have the bottom of the 20d Raff channel being tested at 4458 as I write this. The bottom of the 10d Raff channel is at the 4413 level where we also have the 200ema on the daily - so should get a test this low then again a swing long here is worth a go. The daily chart has given a buy signal already though at the 4471 level so will be interesting to see if we climb from here.

Dax40
Nice drop off the 2h Hull MA yesterday at the 14440 level (well just below, funny that) and the daily chart is just starting to go bearish as well. Germany have been a bit scuppered after their over-reliance on Russian O&G which is feeding through to the market. That said, they will be keen to defend the S1 level at 13969 today and try and keep the Dax above the 14000 level. The bulls would need to break the 14340 level now though as we are just going bearish on the daily with that as resistance. I am looking for a rise towards the 14291 key fib level today though and that may well align with the 200ema on the 30m as well which is declining, though at 14340 currently.

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 FTSE 100, 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 FTSE, DAX, Gold and S&P.
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