Quote from Nick on 16th July 2021, 9:54 am

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

FTSE 100 live outlook prediction analysis for 16th July 2021

Bulls took a bit of a beating yesterday but the FTSE100 remains, just, above the 7000 level. Was it yet another bear trap and they are about to be squeezed though?

The S&P500 defended the 4340 level with a fake break below the 4350 level but now has 2h coral resistance at 4376 to overcome in the near term.  The 2h FTSE100 coral is also red and has resistance at 7094 for today. If the bulls push up this high then worth a go short here.

Initially though we have resistance at 7044 with the daily pivot here, and then a better looking level around the 7075 level where we have the 200ema on the 30m, R1 and also a key fib. As such, any strength this morning to this area could see the bears reappear here.

For the first time in a long time the moving averages on the daily chart have gone bearish and we now have 25ema resistance at 7089. So, again, keep a close eye on this level. The S&P and Dax daily charts are still bullish though, and its probably more a symptom of the FTSE being fairly lacklustre with its upward movements recently as to why they have gone bearish. Or its front running!

Initial support is at the 7020 level as we have a bullish 30m chart to start with and the 25ema is here. Below this then a 6989 is the key fib and its possible that any move below 7000 will get bought up again as it did from 6980 last Thursday. Below 6989 then 6961 is the bottom of the 20 day Raff channel and would be the first test of that in a while as well. Ergo that should hold, at least initially. Below that then 6933 is S2 though I am not expecting us to get that low today.

We may well get the late Friday pump on the US markets as well. Even more likely if that was another bear trap yesterday and they want to turn the screws!

So looking at a possible rise towards the 7100 level today, if 7020 and 6990 hold. Good luck today and have a great weekend.

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Asian Session

Asian stocks and U.S. equity futures steadied Friday while Treasuries trimmed an advance as traders weighed risks to the economic outlook such as elevated inflation and regional coronavirus flareups.

Shares fluctuated in Japan and China after coming off lows, while the Hang Seng index turned higher on Beijing’s plan to exempt companies going public in Hong Kong from seeking cybersecurity regulatory approval. European and U.S. contracts were stable after energy and technology sectors led Wall Street lower. Moderna Inc. rallied in extended trading on an announcement that the vaccine maker is set to join the S&P 500.

Federal Reserve Chair Jerome Powell overnight defended the central bank’s accommodative stance in the face of high inflation. Officials expect a transient surge in price pressures amid the reopening from the pandemic, but some others fear stickier inflation that could hurt economic prospects. The 10-year Treasury yield edged up but is set for a third weekly retreat.

Crude oil is on course for the biggest weekly decline since mid-March, hurt by virus flareups and amid uncertainty over an OPEC+ deal to boost supply. New Zealand’s dollar jumped after the nation’s inflation breached the central bank’s target range, reinforcing bets on an interest-rate increase.

Global stocks remain near record levels but face risks such as an eventual tapering in Fed bond purchases, Covid-19 delta-variant outbreaks and some signs of peaking economic and corporate earnings momentum. Another key question is whether or not the bottlenecks stoking inflation will lead to lasting price pressures and a more constrained environment for monetary policy. [Bloomberg]

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