4th July is….. election day | 8340 8315 support | 8430 8486 resistance

4th July is..... election day | 8340 8315 support | 8430 8486 resistance

Technical analysis for FTSE 100 for 23rd May 2024

Britain's FTSE 100 closed at a two-week low on Wednesday after hotter-than-expected British inflation pushed back hopes of a June interest rate cut by the Bank of England, while upbeat corporate earnings kept declines in check.

The blue-chip FTSE 100 index (.FTSE), opens new tab dropped 0.6%, set for its biggest drop in over a month. The mid cap FTSE 250 also shed 0.4%.
The pound strengthened against the dollar, touching a two-month high and was last trading at 1.2728.

British consumer prices rose 2.3% in April, slowing from a 3.2% increase in March, while economists polled by Reuters expected a 2.1% rise.

Goldman Sachs, Morgan Stanley, and Barclays said on Wednesday that a June rate cut from the Bank of England seemed less likely, while money market participants are now pricing in 62% chances of the first cut in September.

Markets were also anticipating an announcement on the next UK election, with several local media, citing sources, saying Prime Minister Rishi Sunak will call the vote for July 4.

Sunak gambles
British Prime Minister Rishi Sunak called a UK general election for July 4, a major gamble on an earlier-than-expected vote as his Conservative Party trail far behind Keir Starmer’s opposition Labour Party in opinion polls. “I cannot and will not claim that we have got everything right. No government should,” he said. “Now is the moment for Britain to choose its future.” Sunak had been widely expected to wait until the autumn — the deadline was January — to allow more time for a cost-of-living crisis to recede before Britons cast their ballots. Labour has held a poll lead of about 20 points for months, meaning few expect the Tories to extend their 14 years in power. A YouGov survey showed 71% have a negative view of Sunak.

Asia & Overnight
Several Asian share benchmarks fell on Thursday as markets digested the implications of policymakers in major economies preferring to take a patient approach to monetary easing amid sticky inflation.

Geopolitical tensions were also at the forefront of investors' minds as China's military started two days of "punishment" drills held in five areas around Taiwan just days after new Taiwan President Lai Ching-te took office.

That sent Chinese blue chips falling 0.9%, while Hong Kong's Hang Seng Index similarly slid 1.4%.

In the broader market, MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.26%, while Australia's S&P/ASX 200 index lost 0.5%, also hurt by a pullback in some commodity prices.

More hawkish-than-expected minutes of the Federal Reserve's latest policy meeting, a hot UK inflation print and a sobering assessment of New Zealand's inflation problems from the country's central bank have caused investors to pare their bets of the pace and scale of global rate cuts expected this year.

U.S. stock futures meanwhile received a boost after AI darling Nvidia forecast quarterly revenue above estimates after the bell on Wednesday, which sent its shares jumping 5.9% in extended trade.

S&P 500 futures tacked on 0.6%, while Nasdaq futures surged 0.95%.  EUROSTOXX 50 futures inched up 0.38%.

In commodities, gold dipped 0.2% to $2,372.93 an ounce , away from its record high of $2,449.89 hit on Monday, as the prospect of higher-for-longer U.S. rates took some shine off the yellow metal.

Oil prices likewise fell, with brent crude down 0.56% to $81.44 a barrel, while U.S. crude edged 0.7% lower to $77.03 per barrel.

FTSE 100 technical analysis for today, 23rd May 2024

So with the election date now set, Nvidia still bullish, inflation still high and the FTSE100 dipping below the 8400 level, it's up to the bulls today to push it back up. The ASX200 had a bullish session and we may well in fact follow suit, and a rise back towards the 8430 level may well play out. The brief foray below the 8360 support level last night has been retraced, and they will be keen to push past 8400 initially.

That said, we may well see a quick drop down to test the 8340 double bottom support again as we are just testing the 2h Hull MA resistance as I write this at the 8383 level; with the daily pivot also here it is the first line in the sand for the bulls to break.

Above 8383 then 8430 is the next key area with R1 and the key fib here, as well as being the resistance area yesterday before the bell - so again a key level for the bulls to break to push on higher. The 10d Raff channel has started to head down again now though as the bulls are getting beaten back, though the US remains stronger - which could help underpin the FTSE100 for the moment.

Above the 8430 level then the 8485 R2 level is the next one to watch for, and just below the 8495 daily resistance, though we do also have daily resistance at 8470 to watch for.

Support wise, if the bears were to break 8340 then 8317 is next up with the S1 and key fib here, and a level that I would like to see a bounce from if it were to get that low.

Generally it looks like we may well be on for a rise today and a move back above the 8400 level. 8350 is also the bottom of the 20d Raff channel so will be defended by the bulls. The S&P500 bulls are also likely to be keen to build on the bounce from the 5290 level last night.

At 0930 this morning we have the UK PMI data out so keep an eye for that at that time; forecasts are for the same levels as previously pretty much.

A few key levels in play for today and let's see if the bulls can push for the 8430 level. Good luck today.

Interested in how to start trading the FTSE 100? Frequently Asked Questions on Spread betting

Recommended Broker for FTSE 100 trading and how to start trading using support and resistance

Recommended broker IC Markets
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, Trading Tips, Support and Resistance Levels with 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 100, DAX40, Gold and S&P 500.
  • Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
  • Telegram live trading room and group membership for discussion and realtime trade updates

Keep up to date with new content, free sign up below with just your email address

Day trading for beginners - Join today and get:

  • Daily detailed analysis before the market opens
  • Detailed trade plans for the FTSE100, S&P500, Dax40 and Gold
  • Email updates during the day
  • Live trading room open all day
  • Telegram chat room groups
  • Help and support

Membership is £59.99 a month. My results spreadsheet in Excel can be viewed here

Latest technical analysis tips for trading and opinion