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Possible bounce today with 7590 support | 7653 7700 resistance | 7564 below | Debt ceiling

#1 · 25th May 2023, 8:23 am

Quote from Nick on 25th May 2023, 8:23 am
FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
FTSE100 live outlook prediction analysis for 25th May 2023
UK borrowing costs surged to levels last reached under Liz Truss's ill-fated premiership after traders were spooked by unexpectedly strong inflation. The consumer prices index (CPI) dropped to 8.7pc last month from 10.1pc in March, but the Bank of England had expected a bigger fall to 8.4pc.
Meanwhile, core inflation increased to 6.8pc in April, its highest level since 1992. Traders now expect interest rates to rise to 5.5pc by the end of the year, up from 4.5pc currently.
US equity futures rallied on a sharp rise in sales forecasts from chipmaker Nvidia Corp., which fueled gains for Asian tech shares without lifting broader stocks benchmarks in the region. The Japanese market fluctuated while equities fell in South Korea, Australia and China. Declines for Hong Kong’s Hang Seng Index placed it on course for a third day of losses greater than 1% as global investors remained downbeat on Chinese assets.
Asian shares stumbled to a two-month low on Thursday, and the U.S. dollar rose as the impasse in negotiations to raise the U.S. debt ceiling undermined risky assets on worries about the hit to the global economy if the U.S. government defaults.
Well that all got a bit bearish yesterday as the cat got amongst the pigeons as the debt ceiling farce, sorry negotiations, continue. For today we may well see a bit of a relief/dead cat bounce as the NVIDEA results yesterday gave some buying appetite late in the day. Initial support is at 7604 again as we have the daily 200ema here, and that saw a bit of a hold yesterday, and I am half expecting arise towards the 7652 daily pivot initially. Above that then 7701 is looking the next key resistance level as we have the key fib and also the 30m 200ema here. As such should we get to this level then a drop from here may well play out.
The initial support for today is at the 7590 key fib level, so should we see that to start with then I would like to see a bounce here. The 2h chart is bearish as you would expect and the Hull MA is just below that 7700 level, at 7690ish, so again that lends weight to any bounce today stalling at this level. Above that 7740 is the 2h coral on the 2h chart so upper resistance.
The S&P500 has a green 30m coral for support at 4118 and I would like to see that hold as well today, for a bounce towards 4160 at least. It possible that the 4105 level locks in as the low for the moment as well, especially if the bulls can fight back. Also of course once the debt ceiling gets adjusted then the bulls will pile in. Interestingly, the Raff channels on the S&P500 are both still heading up so bullish bias still!
Below the 7590 level then 7564 is S1 and 7500 is S2 and another sell off day would play out if it got that low. Feels like a bounce is brewing though!
Above the 7701 level then 7740 as mentioned, with 7800 back on the cards ultimately as we have R2 here and still have 7827 to test as well. Don't think we will get that high today (stairs up, escalator down) but do bear that in mind.
So, feeling slightly optimistic for today bit only cautiously bullish! Watch the S&P500 to lead the charge higher....
Good luck today.
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FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 25th May 2023

UK borrowing costs surged to levels last reached under Liz Truss's ill-fated premiership after traders were spooked by unexpectedly strong inflation. The consumer prices index (CPI) dropped to 8.7pc last month from 10.1pc in March, but the Bank of England had expected a bigger fall to 8.4pc.

Meanwhile, core inflation increased to 6.8pc in April, its highest level since 1992. Traders now expect interest rates to rise to 5.5pc by the end of the year, up from 4.5pc currently.

US equity futures rallied on a sharp rise in sales forecasts from chipmaker Nvidia Corp., which fueled gains for Asian tech shares without lifting broader stocks benchmarks in the region. The Japanese market fluctuated while equities fell in South Korea, Australia and China. Declines for Hong Kong’s Hang Seng Index placed it on course for a third day of losses greater than 1% as global investors remained downbeat on Chinese assets.

Asian shares stumbled to a two-month low on Thursday, and the U.S. dollar rose as the impasse in negotiations to raise the U.S. debt ceiling undermined risky assets on worries about the hit to the global economy if the U.S. government defaults.

Well that all got a bit bearish yesterday as the cat got amongst the pigeons as the debt ceiling farce, sorry negotiations, continue. For today we may well see a bit of a relief/dead cat bounce as the NVIDEA results yesterday gave some buying appetite late in the day. Initial support is at 7604 again as we have the daily 200ema here, and that saw a bit of a hold yesterday, and I am half expecting arise towards the 7652 daily pivot initially. Above that then 7701 is looking the next key resistance level as we have the key fib and also the 30m 200ema here. As such should we get to this level then a drop from here may well play out.

The initial support for today is at the 7590 key fib level, so should we see that to start with then I would like to see a bounce here. The 2h chart is bearish as you would expect and the Hull MA is just below that 7700 level, at 7690ish, so again that lends weight to any bounce today stalling at this level. Above that 7740 is the 2h coral on the 2h chart so upper resistance.

The S&P500 has a green 30m coral for support at 4118 and I would like to see that hold as well today, for a bounce towards 4160 at least. It possible that the 4105 level locks in as the low for the moment as well, especially if the bulls can fight back. Also of course once the debt ceiling gets adjusted then the bulls will pile in. Interestingly, the Raff channels on the S&P500 are both still heading up so bullish bias still!

Below the 7590 level then 7564 is S1 and 7500 is S2 and another sell off day would play out if it got that low. Feels like a bounce is brewing though!

Above the 7701 level then 7740 as mentioned, with 7800 back on the cards ultimately as we have R2 here and still have 7827 to test as well. Don't think we will get that high today (stairs up, escalator down) but do bear that in mind.

So, feeling slightly optimistic for today bit only cautiously bullish! Watch the S&P500 to lead the charge higher....

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 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