FTSE100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
The FTSE 100 closed higher thanks to a boost from oil majors and mining stocks on the back of rising crude and commodity prices, although gains were limited as investors were cautious ahead of the Jackson Hole symposium.
Asian stocks rose Friday, helped by the technology sector, while the dollar was firm before a speech by Federal Reserve Chair Jerome Powell that’s set to shape views on the pace of US monetary tightening. They were also buoyed by news of possible progress for China and the United States to hammer out an audit deal.
A regional index hit a one-week high amid gains in Japan and Hong Kong, where a tech gauge extended a rally. S&P 500 and Nasdaq 100 futures were steady after a climb in US shares. European futures added more than 0.5%.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6% in early Asia trade, driven by Chinese tech shares listed in Hong Kong that surged 1.3%. Hong Kong shares of Alibaba were up 4%. That helped the Asian index eke out a 0.4% gain for the week.
The Wall Street Journal reported on Thursday that Washington and Beijing are nearing an agreement that allows American accounting regulators to travel to Hong Kong to inspect audit records of U.S.-listed Chinese companies.
Overnight on Wall Street, stocks rose while U.S. Treasury yields slipped, as investors digested comments from Fed officials who continued hammering the point they will drive rates up and keep them there until inflation has been squeezed from the economy.
The S&P 500 climbed 1.4% and the Nasdaq gained 1.67%, lifted by gains in Nvidia and other technology-related stock.
Investors have pared back expectations the Fed could tilt to a slower pace of rate hikes as U.S. inflation remains at 8.5% on an annual basis, well above the Fed’s 2% target. But Powell’s speech due on Friday will be scrutinised for any indication that an economic slowdown might alter the Fed’s strategy.
Interest rate futures now imply a 60% chance of a 75 bp Fed hike in September.
Brent crude rose 0.5% in early Asia trade to $99.87 per barrel and U.S. crude was up by a similar margin to $96.01 a barrel.
FTSE100 live outlook prediction analysis for 26th August 2022
The bulls defended the 2h support at 7475 yesterday pretty well and that remains support again today. Initially though we have a cluster of supports at the 7500 level, with the daily pivot, 200ema and the 30m coral all here. If that holds then we may well get a move up towards the 7536 R1 level (and linking in with yesterdays high) before a push towards the 7575 resistance level again.
Of course it’s all eyes on Jackson Hole and the imminent direction for rate moves which will determine most of today’s action. Some media saying that the Fed may well remain tight lipped and not give too much away.
Above the 7575 level then R3 is at 7608 though that seems rather optimistic given its a Friday ahead of a long weekend in the UK (bank holiday on Monday so no analysis that day).
If the bears were to break below the 7475 then 7464 is S1, but also the key fib at 7453 to keep an eye on. Once again we may well see the buy the rumour, sell the news pattern play out. And probably a late evening pump in the USA ahead of the weekend.
7428 is then S2 lower down, but I don’t think we will get that low today. 7455 is also the 25ema on the daily, and ignoring the stop hunt down to 7410 on Wednesday has helped to underpin the recent strength.
S&P500
The bulls will be keen to break above the 4200 level that got a modest reaction yesterday evening, as that opens up a move towards the 4216 R1 level, but possibly as high as R2 at 4239. It will be mostly Fed driven today though, so if the bears start to drop it off to start with and are able to break below the daily pivot support at 4178 then a dip down towards the 4154 key fib looks possible. That would of course weigh on the FTSE100 as well.
So, remain cautious today as news starts to come out from Jackson Hole, plus Friday can be a good day to do lower stakes/less risk. Have a great long weekend!
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