FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 closed higher Wednesday as gains in financial shares outweighed weakness in resource stocks. The blue-chip index rose 0.4%, with banks up 2.5%. Consumer staple names British American Tobacco, Unilever and Reckitt Benckiser Group were also among the top gainers.
Rio Tinto fell 4.8pc to the bottom of the index after the iron ore major posted lower-than-expected shipments in the first quarter and warned of risks from high inflation, Covid lockdowns in China and a prolonged Russia-Ukraine war.
Asian stocks traded mixed and U.S. futures climbed Thursday with investors seeking clues on Chinese policy support and pondering a burgeoning debate around whether inflation is peaking. Treasuries pared a rally.
Equities rose in Japan. They fell in Hong Kong and China where an address by President Xi Jinping failed to soothe investors pining for more measures to support growth. S&P 500 and Nasdaq 100 futures advanced after positive earnings from Tesla Inc. and United Airlines Holdings Inc.
Rate markets underwent a sharp repricing Wednesday, sending long bond yields sinking. Investors such as Bank of America Corp. and Nomura Asset Management said this is a buying opportunity after the recent rout. Ten-year yields trimmed a steep retreat, with central bank stimulus withdrawal looming large. The dollar pared a slide and the yen resumed a decline.
Chinese tech stocks fell for a third consecutive day, weighed by shares linked to electric vehicle production as lockdowns on the mainland disrupt logistics. Investors have so far been disappointed at Chinese attempts to counter the economic impact of lockdowns.
While the peak-inflation debate is intensifying, it’s unlikely to derail global central banks from their tightening path as commodity shortages from the war in Ukraine keep prices elevated. New Zealand inflation accelerated in the first quarter to the fastest pace in 32 years, validating the central bank’s pursuit of an aggressive tightening cycle.
In an ominous sign for risk assets, U.S. 10-year real yields briefly turned positive on Wednesday for the first time since March 2020 as traders added to bets on an aggressive Fed hiking cycle.
Missile Test
Russia said it test fired a new nuclear-capable intercontinental ballistic missile, upping the ante almost two months since the country invaded Ukraine. President Vladimir Putin was shown on state television watching a video of the launch and remarked that the weapon would “reliably guarantee Russia’s security against outside threats.” Meanwhile, a growing number of senior Kremlin insiders are quietly questioning Putin’s decision to go to war; a group of finance ministers and central bankers from countries including the U.S., U.K. and Canada walked out of a G-20 meeting when Russian officials started speaking; and Wimbledon has banned tennis players from Russia and Belarus from the tournament.
FTSE 100 live outlook prediction analysis for 21st April 2022
The FTSE100 pushed on yesterday helped by a strong S&P500 in the end which has continued to pull away from the daily coral at 4378 tested on Monday. The FTSE100 is now at the daily resistance level at 7644 and this level will be quite key this morning.
If the bulls can push past this then we should see a rise towards the R2 at 7670 as we have the key fib here too. Initially today I am thinking that we dip down to the 7611 level where we have the 200ema on the 30m, and also another test of the 2h coral line.
The daily pivot is at 7620 in the mix as well while the momentum remains with the bulls for the moment. The S&P bulls will be keen to break above the 10 day Raff channel at 4480 which it is at as I write this.
The Raff channels on the FTSE100 continue to head up so should the bulls manage to break above the 7672 level then we should see a rise towards the 7700 level pretty easily where we have R3, and a break of that will likely open up a test of the daily resistance level at 7735 where we have the top of the 20d Raff channel for today. That does seem a bit of a big ask against the pessimistic news flow, but as we know, news has little bearing!
For the bears they will be looking to move it below the 7620 initially then the 7611 level. A break of 7590 would get them excited as the 7590 level was defended well yesterday, and would open up a drop down towards the 7550 level. 7555 is also S3 for today, and we have still to test the 25ema on the daily at 7542 for today. As such should we drop down to this level then a swing long is worth a go here.
S&P500
Sitting on the 10d Raff channel top at 4480 as I write this first thing today and as such we may well see a drop from here down to the 4444. That also ties in with another test of the Hull MA and also the S1 and 200ema 30m level. I would like to see that hold for another push up and a possible break above the 4480 as we should see 4499 then where we have the key fib (and round number!).
A break of 4444 though and then a retest of the 4415 200ema on the daily is likely. The bulls have fought well since the drop down to the green coral line at 4378 on Monday and will be looking to keep the momentum going for the moment though.
Dax40
Also rising nicely on the daily chart, pulling away from the 14000 level. 14200 area is looking like decent support today and should we drop off the 14400 key fib resistance first thing then a leg down to here may well play out.
Above the 14450 level then 15540 is R2 and the top of the 10d Raff channel. Below the 14200 then 14049 is S2 and also the daily coral line, that may well change to green this morning as its levelling off. If so then that may well hold for the bullish April to continue. Seasonally April is bullish don’t forget!
Good luck today.
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