FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
- FTSE 100 rose 0.3% yesterday
Asian stocks and US futures fluctuated in choppy trading Thursday as traders weighed downbeat remarks on China’s economy by Premier Li Keqiang with Federal Reserve minutes that struck a less hawkish note. China has admitted its economy is faring worse now than during the depths of the pandemic as Beijing’s zero-Covid policy takes its toll.
Li Keqiang, China’s Premier, warned that “economic indicators in China have fallen significantly, and difficulties in some aspects and to a certain extent are greater than when the epidemic hit us severely in 2020”.
Mr Li called on officials to make sure the unemployment rate falls after it climbed to 6.1pc in April – the highest since February 2020.
An MSCI Inc. gauge of Asia-Pacific shares wavered as Japan edged up, while Hong Kong slipped. S&P 500 and Nasdaq 100 futures swerved between gains and losses. Overnight, the S&P 500 rebounded from a drop to end higher, while the tech-heavy Nasdaq 100 outperformed.
Chinese stocks saw mixed trade as investors remain watchful of measures to combat an economic malaise from strict Covid curbs. China’s economy is in some respects faring worse than in 2020 when the pandemic first emerged, Premier Li said, urging efforts to reduce a soaring unemployment rate.
Yields on 10-year Treasuries edged higher, as did two-year rates, which are more sensitive to imminent policy moves. Fed policy makers indicated their aggressive set of moves could leave them with flexibility to shift gears later if needed. The dollar slipped.
Investors took some comfort from the Fed minutes that didn’t show an even more aggressive path being mapped to tackle elevated prices. Still, volatility has spiked as the risk of a US recession, the impact from China’s lockdowns and the Ukraine war simmer.
Missing the Target
China’s commitment to Covid Zero means it’s all but certain to miss its economic growth target by a large margin for the first time ever. Economists’ median forecast for GDP growth this year has dropped to 4.5%, according to the latest survey compiled by Bloomberg, well below the official target of about 5.5%.
FTSE 100 live outlook prediction analysis for 26th May 2022
The S&P tested the 4000 level yesterday on the Fed minutes that didn’t show an even more aggressive path being mapped to tackle elevated prices, however the FTSE100 still failed to break above the 7555 resistance area that we have had for a while now. 7620 remains above that should they do so though.
The daily chart for the FTSE100 remains bullish with the 7450 level 25ema still to be tested since it changed to bullish, so a dip down to that and further upside does still make sense and fit the chart. With the recent stalling at the 7555, the 2h chart has gone bearish again with 7530 now as resistance.
If the bulls are quick out the blocks today we could see a rise towards that 7530, and then possibly 7566 above that. That may well tie in with the S&P retesting that 4000 level, and then another slide from those areas. The S&P could though be on for a test of the R2 level at 4048 today, so bear that in mind.
7600 splits those two resistance levels on the FTSE100 with R2 here.
For the bears they will be looking to break 7500 and S1 at 7497, though we then have a cluster of supports at the 7483 level with the key fib and the 200ema here. That is also the green 2h coral line and we haven’t tested that since it did change colour to a bullish trend. As such, keep an eye on this area this morning and we may well see a bounce here. As an aside, the first test of the green coral on the S&P yesterday at 3920 held well and saw a decent 80 point bounce…..
Below 7485 then then 7461 level is S2 and 7450 25ema daily as mentioned. If it breaks that then it will get quite bearish for a while and a slide down to the 7322 area for a test of the 200ema not he daily during the next few sessions may well play out.
For today however, watch 7485 for decent support. 7555 and 7621 as resistance.
S&P500
As mentioned I am watching the 4000 and 4048 levels as the main resistance for today. For support the daily pivot at the 3964 level for initial support then 3950 200ema 30m below that. I do think the bulls will want to retest the 4000 level at least today.
Dax40
We have dropped off the key fib at 14094 overnight, and we could get down to test the support one at 13885 this morning. If we do then a bounce here would make sense and the bulls will certainly be keen to recapture the 14000 level. The 2h chart is on the cusp of going bullish so if the bulls put in a decent performance today then we could see that lock in. Likewise the daily chart is just bullish with EMA support at 13993 to start with today. Its possible that the bulls bounce it off this level. Above the 14100 level then 14145 is next up with R2, and then 14300 which has gapped the bulls a few times recently. If the S&P does rise to the 4048 area then it may well pull the Dax up a bit with it.
Good luck today.
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership and Live Trading
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates
Keep up to date with new content, free sign up below with just your email address