FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 has continued its positive streak, closing 0.2pc higher at 7,563 yesterday. However after the bell the US sold off and brought the FTSE100 futures down with it to the point that 7551 remains key resistance on the 2h chart.
The blue-chip index is on track for its fourth consecutive week of gains as heavyweight energy, mining and banking stocks have helped it outperform both the wider European index and the FTSE 250 this year.
Meanwhile, Asian stocks declined Friday after a slew of Federal Reserve officials signaled they will combat inflation aggressively and the Nasdaq 100 fell to its lowest level since October.
Equities tumbled across the region, with indexes in Japan and Korea down more than 1%. U.S. futures fluctuated after American stocks tumbled Thursday, led by technology companies, which are seen as most sensitive to higher rates. Treasury yields rose, while Japan’s five-year yields climbed to their highest level since 2016.
Fed Governor Lael Brainard said officials could boost rates as early as March to ensure that generation-high price pressures are brought under control. Federal Reserve Bank of Philadelphia President Patrick Harker and Chicago bank leader Charles Evans joined the calls by their policy-making colleagues for higher interest rates this year.
Rising rates — an upshot of strong economic growth — could drive investors toward value stocks, which tend to be more cyclical and offer near-term cash flows.
In Asia, the Bank of Korea raised interest rates on Friday for the third time since the summer. The rare back-to-back hike likely indicates that Governor Lee Ju-yeol had become increasingly uncomfortable about waiting to move again, following recent signs that the Fed will probably raise borrowing costs earlier and more aggressively.
No-Go Zone
China’s unbending approach to Covid-19 has left the world’s second-largest economy all but shut off from international travel, with fewer than 500 inbound flights scheduled this week, compared with about 10,000 this time two years ago. It’s not just air travel that’s suffering. On the seas congestion is building around Shanghai’s port as ships try to avoid Covid-induced delays at nearby Ningbo, and the virus has now been found in the port city of Dalian, posing a new threat to supply chains. China is likely to post its weakest economic growth in more than a year when it releases quarterly data Monday as it counts the cost of a deepening property market slump and disruption from the virus outbreaks.
FTSE 100 live outlook prediction analysis for 14th January 2022
The bulls were not really able to push on much past the 7555 level yesterday but they have hung on well in light of the drop on US markets yesterday evening. That does bode well for the US markets to snap back up though when the FTSE doesn’t follow them. The key level now is the 7551 mentioned as we have the Hull moving average here on the 2h chart and that’s the level that the bulls will need to break. With it holding up pretty well it does lend weight to the FTSE100 continuing to remain bullish for the moment and the chance for a decent performance this year remains. Will this be the year that we see 8000 on the FTSE100?
Above the 7551 level then the 7570 level is next up which is where we topped yesterday and then above this the 7613 daily and S3 level looks good for a short if it were to get that high today. However, as its Friday and ahead of the weekend we may well see a bit more cautiousness rather than lots of volume piling in long.
Above this then 7646 is the top of the 10 day Raff channel though I am not expecting us to get that high today. Worth a short though if it did so!
For support I am looking at the 7491 level being fairly key – we have S2 and the key fib here, and the support at 7510 from yesterday (and the long order level) has held well overnight and seen a decent bounce so far. As such, we may well see any dip get bought up again.
Below 7490, 7476 is the 10 day Raff channel bottom and a level that I would expect to hold, however if not then a slide down to 7420 again looks possible. This level has proven fairly strong recently, both as support and resistance so may well play a part again!
The Raff channels continue to head up, though with the S&P having a bit of a wobble yesterday the bulls will really need to recapture 4700 and hold above it. 2h resistance is at 4701 and the 2h coral at 4691 – above these then there is a chance that 4715 gets tested and with the key fib here (and possible false break higher) we may well see the bears appear here. Along with bulls banking any profits ahead of the weekend.
So, usual Friday caveat applies – be a bit more cautious and I am looking at an initial drop off the 7550 level.
Good luck today and have a great weekend!
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S&P500 bulls losing this battle!