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FTSE100 live outlook prediction analysis for 22nd May 2023
Asian stocks and Wall Street futures struggled on Monday as U.S. debt ceiling negotiations approached crunch time after stalling last week, while lingering banking fears and fresh geopolitical worries also capped sentiment.
U.S. President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday, less than two weeks before the June 1 deadline after which Treasury expects the federal government will struggle to pay its debts.
On Friday, reports that debt ceiling negotiations had reached an impasse rattled markets even as Federal Reserve Chairman Jerome Powell said U.S. interest rates might not need to rise as much given the tighter credit conditions from the banking crisis. The Fed chief also flagged that after a year of aggressive rate increases, officials can afford to make “careful assessments” of the impact of rate hikes on the economic outlook, a stance that was viewed as dovish by markets.
Was a nice drop down on Friday to the 7750 level and a decent recovery which has held well on the futures over the weekend. Looking at the S&P500 it looks like we may well see a dip and rise play out on that, and in turn that should also see the FTSE100 do the same. The 7790 resistance level remains the one to watch with 7820 above that.
The 2h chart is looking a bit more optimistic to start with today as well, and a drop down to the 7761 30m 200ema would tie in with the 2h supports at 7760 from the Hull MA and then 7755 for the 2h green coral. It would be the second test of this coral line as it was this that we climbed back off on Friday, so it’s worth keeping an eye on it as the more it’s tested the weaker it gets.
The daily chart still has bearish moving averages too, and the drop off the 25ma at 7800 managed a 100 move down which has mostly been recovered. The daily supports are still at the 7707 and then 7675 levels for this week so worth keeping an eye on these two for the short term.
We have a few Fed speeches today, so traders will be looking for clues about a pause on rate rises from them both, with Bullard at 1330 and Bostic at 1530.
The S&P500 has initial resistance at the 4205 area with the red 30m coral here, and also R1, so if we get an early rise to that then we could see a drop off to test the 4160 support area. The bulls would be keen to defend this and if they manage it then we should see a decent climb towards the top of the Raff channels at the 4230/4240 area.
The Dax40 remains pretty bullish too, with both the Raff channels heading up still. With resistance to start with at the 16330 area with R1 and the key fib, we could see a drop from there down to these 16205 S1 level and then some buyers appear here. The 2h chat has decent support higher though at 16250 and then the green coral at 16105. Not sure it will get that low today though!
So generally looks like a bit of a repeat of Friday, at least for the FTSE100. A dip down to the 7760ish area then a climb back up.
Good luck today.
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