Sluggish China | More rate rises | 7438 7480 resistance | 7400 7370 support

FTSE 100 trading prediction and analysis for 18th July 2023


FTSE 100 trading prediction and analysis for 18th July 2023

The commodity-heavy FTSE 100 ended 0.38pc lower Monday after mining stocks were hit by lower metal prices and weak growth in China.  The internationally-focused index closed trading down 28.15 points at 7,406.42. The FTSE 250 midcap index closed 0.87pc at 18,404.43. Industrial metal miners dipped 1pc as prices of most base metals came under pressure.

Asian stocks fell on Tuesday as weak Chinese economic data released the previous day continued to weigh on sentiment, while investors were waiting to see if U.S. retail sales data would shine a light on the path for U.S. interest rates. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.63% in the morning session.

FTSE 100 trading prediction and analysis

The FTSE 100 remained within that range yesterday of 7390 and 7440, just teasing both the orders, but consolidating the recent rise pretty well. We may well see a bit of bear Tuesday today and a dip and rise play out for the FTSE 100 today though. The S&P500 looks more positive than the FTSE 100 to start with and the bulls will be keen to defend the daily pivot at 4518. We also have the green 30m coral here to lend some weight.

Initial support on the FTSE 100 is at the 7402 level with the 30m 200ema here, and then below this the daily 7392 nearly got tested yesterday so remains in play for today. Below that the next level of note is 7362 and with this being just below R2 and the key fib, both at 7369, any drop to this I would like to see defended.

On the bullish side, initial resistance is at the 7437 R1 level and also ties in with yesterdays high so if we get an early rise to here, we could see the bears appear for a bit of bear Tuesday action.

Above this level then we have the bearish Hull MA on the 2h at the 7462 level and a possible test of higher up and the recent 7480 once again. With R3 at 7482 as well then this area of resistance will likely be fairly strong if it were to get that high today.

A lot will depend on the news today... Investors are waiting for stronger signs of inflation cooling, with the readings on U.S. retail sales and U.S. industrial production to be released later on Tuesday. Economists reckon retail sales in June will show a 0.5% rise from May.

Further rate rises from the ECB and the BoE are looking likely, and as mentioned previously I still expect UK rates to get to 6.5% before too long. They were too late to start rising and too reckless with QE for them to be too relaxed now "taming inflation".

The Dax 40 meanwhile looks like it wants to rise towards the key fib and R2 level at 16180 and agin, the bulls will be keen to defend the pivot at 16061. We may well see a rise and dip on this as well today in a similar vein to the S&P500.

Good luck today.

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