FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Investors ended the week on a cautious note with markets falling as fears build over just how much the US Federal Reserve will need to bump interest rates to combat rising inflation. The FTSE 100 closed the day down 0.3pc at 7542, although it was up on the start of the week.
Investors remained unimpressed by JPMorgan posting strong profits in its latest results
Meanwhile, Asian stocks and futures were mixed Monday as traders weighed a global advance in sovereign bond yields and policy easing by China’s central bank to counter an economic slowdown.
Shares in China and Japan gained but Hong Kong declined. S&P 500 and Nasdaq 100 futures fell, while European contracts climbed. A dollar gauge ticked higher. U.S. stock and bond markets are shut Monday for a holiday.
The People’s Bank of China exceeded market expectations for stimulus by cutting two key policy interest rates ahead of a report showing economic growth slowed last quarter to 4%. A real-estate slump and partial Covid shutdowns are among the challenges for the world’s second-largest economy.
Bond yields in Australia and New Zealand rose after U.S. Treasuries tumbled Friday. The 10-year U.S. yield — a linchpin for valuing a range of assets — is back up at levels seen before the pandemic roiled global markets in 2020, spurring a rethink about the outlook for markets. Treasury futures slid.
US markets are closed today for Martin Luther King Day.
China’s economy, still hurting from a property market slump that’s just reached the country’s biggest builder, is now bracing for a hit from partial shutdowns as authorities extend efforts to halt the spread of Covid-19. GDP data due Monday will likely show growth slowed to its weakest in more than a year, according to economists in a Bloomberg survey. Some analysts are betting that a rate cut could come as soon as Monday as the central bank looks to front-load its support. Separately, emerging-market central banks were the first in the world to raise interest rates from their pandemic lows last year. That proactive tightening is starting to pay off big time in boosting returns from their local bonds.
FTSE 100 live outlook prediction analysis for 17th January 2022
With the US markets closed today for Martin Luther King day we may well have a slightly flatter session for a Monday. However I wouldn’t be surprised if we break through the 7570 resistance level that we dropped off from on Friday, and has capped proceedings so far (nice short off that Friday wasn’t it!). If the bulls do manage to break through this then we should see a rise towards the R2 level at 7613 and just above the key fib resistance level at 7597.
If the bulls were to push past this though then the next level of note that I have pencilled in is at 7655 where we have the top of the 10 day Raff channel and R3 for today. I don’t think that we will be able to get that high without the US in play, so a stall at the 7613 area looks more probable for any bullishness today.
Initially we may well get another dip off this 7570 level though we have some decent looking supports in play to start with, not that far below. As such the downside may be limited. Bull Monday on the cards?!
First support is at 7550 at the daly pivot and we also have the 30m green coral here so I think this should put up a decent fight to hold today. However, if the bears can get through here then the pink arrow on the chart comes into play and support at the 7527 level is next up where we have S1. This is also just below the 200ema on the 30m, at 7531.
Below this then the key fib at 7499 is next up, though we probably won’t get this low today. Bear it in mind though!
So whilst expecting a flattish bullish Monday, the S&P daily chart has actually gone bearish with the failure of the bulls to really push on so far in 2022. The 25ema resistance level at 4694 looks like its about to come into play and may well cap any rises in the short term, and a leg lower from there over the next few weeks would also fit the seasonality pattern. Mid January usually sees a bit of bearishness kick in.
The 2h chart for the S&P500 has also gone bearish with key resistance at 4686 and 4690 – ergo a short at this area looks good to go!
So generally looking at a bit of a rise today and watching 7613 and 4688 as the key resistance levels.
Good luck today.
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