FTSE 100 live outlook prediction analysis for 4th May 2021
A string of positive corporate earnings helped to buoy the FTSE 100, leaving it up for the third successive month in a row though still below the threshold of 7,000 it topped earlier in April. The benchmark added 8.33 points to 6,969.81, securing a monthly gain of about 3.8pc, the most since November.
The FTSE 250, which hit record highs this month, finished April’s final day of trading with gains of 104.43 points at 22,497.37.London’s gains came as the eurozone suffered a double dip recession at the start of the year.
Sterling meanwhile slipped against the dollar and euro as traders await the Bank of England’s policy meeting this week.
Virus Waves
It’s not just India. Fierce new Covid-19 waves are enveloping developing countries around the world. Laos and Thailand, Bhutan and Nepal, Fiji and Trinidad & Tobago are all suffering, largely because of more contagious virus variants, although complacency and lack of resources to contain the spread have also been cited as reasons. In India, Prime Minister Narendra Modi is resisting pressure to lock down as deaths continue to rise, while Singapore has deferred non-urgent surgeries amid its worst flare-up in months. Elsewhere the U.S. administration will support Pfizer’s move to begin exporting U.S.-made doses of its coronavirus vaccine, and the EU plans to reopen its borders after months of pandemic-induced restrictions, possibly as soon as the end of May.
Opening Up
Asian stocks look set to open modestly higher after a muted session on Wall Street, where technology giants weighed on the market. The dollar dropped with Treasury yields. Futures pointed higher in Australia and Hong Kong. Trading will be limited with Japan and China among markets closed for holidays. Benchmark 10-year Treasury yields dropped back to around 1.6% as Federal Reserve Chair Jerome Powell said the economic recovery remains patchy. Commodities advanced, with silver leading gains in precious metals. Copper and oil climbed more than 1% amid broad rallies in energy and material stocks.[Bloomberg]
US & Asia Overnight from Bloomberg
U.S. equity futures retreated and Asian stocks were mixed Tuesday following weakness among the technology giants on Wall Street. The dollar rallied.
Taiwan’s benchmark bore the brunt of a sell-off, shedding as much as 3.3%, after beating all other major gauges globally in April. South Korean shares edged down while Hong Kong and Australia rose modestly. Trading will be limited with Japan and China among markets closed for holidays. U.S. contracts fell after the S&P 500 ended near session lows and shares such as Tesla Inc. and Amazon.com Inc. weighed on the Nasdaq 100.
Ten-year Treasury yields dropped back to around 1.6% in U.S. trade amid comments from Federal Reserve Chair Jerome Powell that the economic recovery is patchy.
A gauge of commodity prices is at the highest level since 2012. Silver is among the precious metals that have rallied as the prospect of near-zero rates for longer boosts demand. Oil was steady after climbing over 1%. Digital token Ether extended its surge to set another record.
Data showed growth among U.S. manufacturers cooled in April, while a gauge of prices paid for materials jumped to the highest since 2008. The figures were a reminder that the rebound from the pandemic still faces risks, such as faster inflation. Powell reiterated progress in the recovery has been uneven across racial and income divides. New York Fed President John Williams said current conditions are “not nearly enough” for a shift in the monetary policy stance.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Might be a bit of a choppy start as it often is after a bank holiday, but generally it looks like the bulls remain in charge. The S&P dropped off its 2h resistance yesterday at 4204 but the support level at 4180 has been defended. If the bulls can push past the 4210 level then that should manage 4220 and higher. In turn that will likely pull the FTSE 100 up with it, and we may well see a rise towards the fib level at 7040.
That said, we have initial resistance at the 7025 level still which is the recent high, and also just above R1 which is at 7016. The bulls will certainly be keen to recapture and hold 7000 today to start the month strongly.
The Raff channels are both now heading up and though we often hear “sell in May” touted, statistically, holding has been the better play in recent years. As such, we may well see less selling at the start of the month. End of the month might be a different story though!
Above 7040 and then 7057 is R3 and I am not thinking we will get much higher than that today, though the top of the 10 day Raff is then on the radar at 7092, and should the bulls go for it then this level is one to watch. Might well be worth a short here if its seen.
For the bears they will be looking to break 6975 initially as we have S1 and the the 200ema here, and if they manage that then 6949 is the key fib level and in turn support. We also have S2 here. Below that then 6933 is S3, and also the cam break out level but I am not thinking we will get that low today. Essentially we may well see the new month money flow in today, at least initially. The S&P holding 4175 is a good sign for the bulls too. Below this then 6910 is the next support being the low from 26th April, with 6842 below that.
So looking at a possibly dip and rise today and looking at 7025 and 7052 as the main resistance levels. 6975 and 6950 as the main supports. Good luck today.
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