FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 inched higher after a three-day sell off, but gains were capped overall on global growth fears stoked by China’s strict Covid curbs and an expected streak of aggressive policy tightening by central banks. The blue-chip index closed 0.1pc higher at 7,386, a day after hitting its lowest closing level since March 18. After the bell was a different story with prices collapsing to a low of 7298 to test the 200ema on the daily, whereupon we have had a bounce to get back to yesterdays closing price.
Most Asian stocks fell Wednesday as mixed corporate earnings, China’s Covid challenges and the prospect of aggressive Federal Reserve monetary tightening pointed to a deteriorating economic outlook.
Japan dragged an Asia-Pacific share gauge to the lowest since 2020 after U.S. shares slid Tuesday, hurt by a technology-sector selloff. S&P 500 and Nasdaq 100 futures stabilized, while European contracts dipped.
China’s bourses bucked the downbeat Asian trend, carving out a gain after President Xi Jinping vowed more infrastructure projects — the latest step to support a lockdown-hit economy. The Covid outbreaks in Shanghai and Beijing also showed tentative signs of steadying.
Prevailing risk aversion supported the dollar, which was around the highest level in nearly two years. Treasuries retreated but the benchmark 10-year yield, at 2.76%, remains lower for the week.
The euro touched the weakest level versus the greenback since 2017 amid worries that Moscow may choke gas flows to Europe, hurting the region’s growth in the ongoing fallout from Russia’s invasion of Ukraine.
Russia will cut off supplies to Poland and Bulgaria Wednesday, making good on a threat to halt flows to nations that refuse to pay for the fuel in rubles. Oil held at $101 a barrel, with Europe mulling curbs on Russian crude.
The energy brinkmanship and disappointment over earnings from the likes of Alphabet Inc. and Texas Instruments Inc. sowed further doubts about the outlook for markets. The mood was already fragile due to Fed tightening to quell runaway inflation and slowing activity in China as Covid lockdowns bite.
Energy War
Russia will cut off the gas to Poland and Bulgaria on Wednesday in a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine. President Vladimir Putin had threatened to staunch the flow to countries that refuse to pay for the fuel in rubles. Along with the possibility of blackouts, here’s what could happen. Meanwhile, the U.S. is seeking more authority to seize and sell assets such as superyachts, jets and mansions held by wealthy Russians; Germany is sending 50 anti-aircraft tanks to Ukraine; and the U.S. blasted Russia’s talk of nuclear war as the “height of irresponsibility.”
FTSE 100 live outlook prediction analysis for 27th April 2022
The bulls have fought back overnight having had the FTSE100 drop down to test the 200ema on the daily at 7298 and we may well see a possible rise towards the 7460 level today.
Initially we could have a dip down to the 7350 level as we are just hitting the 2h resistance level from the Hull MA at 7385 as I write this.That said its 50/50 if we get an initial drop down as the momentum will be for a rise. However, it’s still very much short the rallies for the moment as mentioned the other day, as the backdrop of fear still prevails. Russia throwing WW3 into the mix doesn’t help!
7464 is the 200ema on the 30m chart and the level that I am watching closely for the bears to have another go from today. A rise to there and then a drop down would fit pretty well, and would tie in with he S&P500 rising to test its 2h resistance at the 4220 area, possibly even 4240, before dropping off.
We also have R1 at 7451 which would make sense for a test, and above that 7465 level the bulls would probably try and get the price back above the 7500 level. However with the recent drops the daily chart has gone bearish again and the 25ema on that has now become resistance with 7503 as the level to watch. Ergo any rally to this level is also worth a short.
For the bears they will be looking to break below 7350 initially as that opens up the key fib at 7309, and then also another test of that 200ema at 7296. It could well hold a second time, especially in hours, though the more its tested the more likely it is to break.
Below that then 7264 is S1, and then that 7200 is still on the radar as daily support, with the S2 level 7188 in play for today. That said, the bottom of the 20d Raff channel does align with the 200ema on the daily so we should have decent support here.
S&P500
Still short the rallies for this really, with the 4220 area as initial resistance with the Hull MA here on the 2h. Above this then the key fib at 4241 is next up and then 4280ish for a test of the declining red coral on the 2h. Support is at the 4165 level with 4105 S1 below that.
Dax40
A rise to the key fib at 13861 would work well before a drop off from there to test the lower key fib at 13631. As with the others the 2h chart is bearish and the Hull MA resistance is at the 13900 level as well. Initial resistance is at the daily pivot and 30m coral at 13769 so the bulls will be keen to push past this this morning.
So, could be another interesting day, with a rise and dip looking like the preferred move. Stay nimble and good luck today.
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