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FTSE100 live outlook prediction analysis for 18th October 2022
The bulls failed to hold above the 7000 level yesterday and we have dropped off a bit overnight as well. The 6920 level is funnily enough back in play as support, as we have the 200ema and the key fib for today just above this level, so should we drop down to that then we may well see a bounce.
Inflation figures out this morning showed a small increase to 10.1%. UK inflation has returned to double digits as the latest data from the ONS shows that consumer prices rose by 10.1pc in the year through September. This is a slight increase from August when it was 9.9pc and just above forecasts of 10pc. On a monthly basis, consumer prices rose by 0.5pc in September, which is the same as in August. Food and non-alcoholic drinks were the largest drivers of inflation, rising by 14.5pc – up from 13.1pc in August. This will pile more pressure on households at a time when bills and mortgage costs are already rising rapidly. This comes as the Government refuses to rule out scrapping the triple lock, which ensures that state pensions rise in line with inflation. Abandoning the policy could see pensions fall significantly in real terms from next April.
Initial support this morning is at the daily pivot at 6970, though with the inflation data out this may break initially/overshoot. That said, the Hull MA on the 2h chart has support at 6940 so a possible overshoot to this at the bell may well play out.
I am thinking that the bulls will try again to break above the 7000 level, though we have resistance at 7020 with the R1 and key fib level here. Once again they will be trying to close above 7000 to get things a bit more optimistic. If they can, and it also looks like the S&P500 wants to push up towards the 3780 level today, then things could start to look up for the bulls.
The daily chart on the Dax has just gone very weakly bullish as well, with 13000 being the main line in the sand that the bulls will want to recapture.
Above 7020 then 7068 is the R2 level and also the top of both the Raff channels so should we get a rise to here then I would expect to see a bearish reaction – profit taking from the recent climb and some new shorts coming in.
Below the 6925 level then the 2h coral is now green and at 6890 (and rising slowly) so should we dip here then a long here is also worth a go today.
Basically there is a lot of chop still around (could be signalling a trend change of course) but do bear that seasonality chart in mind.
Good luck today.
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