Quote from Nick on 10th May 2023, 9:41 am

FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help

FTSE100 live outlook prediction analysis for 10th May 2023

The FTSE 100 finished in the red after closing 14.29 points or 0.18pc lower at 7,764.09.

Stocks were struggling to advance in Asia and the dollar was firm on Wednesday ahead of U.S. consumer price data that could damage hopes for interest rate cuts later this year if inflation fails to show much of a decline. MSCI’s broadest index of Asia-Pacific shares outside Japan had fallen on Tuesday and inched down a further 0.3% early on Wednesday. Japan’s Nikkei fell 0.4%.

Overnight the S&P 500 fell 0.5% and S&P 500 futures were steady in the Asian morning. A firm U.S. dollar pushed the euro back below $1.10 to $1.0971.

Today is of course has the big news with US inflation data out at 1330 that the markets have been on tenterhooks waiting for. The forecast is for a slight decline to 5.5% for the core rate, and YoY to remain at 5%. That news is out at 1330 today so expect the volatility to start ahead of that and continue after.

After yesterdays drop and also a break of the 7750 support level (since recovered) it looks like that was just a stop hunting flushing exercise and we may well see a rise today. There seems to be an awful lot of strange moves the past few weeks with levels overshooting, stop hunts and so on. Always slightly suspicious!

With the drop yesterday the 2h chart has gone bearish again, with the 7766 level as initial resistance from the Hull MA. However I am expecting an initial rise this morning towards the 7800 level to test R1 instead. The daily chart has also gone bearish given the recent weakness and we are just brewing an EMA cross on that with 7792 as resistance. It's not locked in yet, but any weakness today will make that happen, and then further downside could be on the cards unless the bulls step up today. Bit of "Sell in May" kicking in once again....

Above the 7800 level then the 7850 area is the next level of note, as R2 is at 7844 and also the top of the 10d Raff channel here, along with daily resistance at 7862. I am not ruling out a test of that today, especially if we get a bullish afternoon.

The S&P bulls will certainly be keen to continue to defend the 4120 level and the 30min 200ema here, otherwise a slide down to the 4103 level looks like it will play out. Interestingly the 2h chart for the S&P remains bullish, and has key supports at 4118 and 4113 so keep an eye on them.

Will we get a buy the rumour sell the news or will the news at 1330 drive the market up? I wouldn't be surprised to see more upside this afternoon, and a push towards the 4135, and 4150, levels on the S&P.

For the FTSE bears, they will be looking to break the 7735 level which was yesterday's low, and would trigger a slide down to the 7691 daily support and possibly as low as 7650 which is the next key level below that - S3 and the bottom of the 20d Raff channel. That said, I think the bulls are going to try and defend today.

So, stay nimble again today and don't forget the news at 1330. Good luck today.

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