Technical analysis for FTSE 100 for 16th November 2023
The FTSE 100 rose 0.62pc yesterday to close at 7,486.91. The biggest risers were Experian (up 7.53pc), St James’s Place (up 6.57pc) and Ocado (up 5.6pc). Tesco and Diageo both dropped 1.83pc. Meanwhile, the FTSE 250 increased 0.76pc to 18,676.48.
Asian shares halted a three-day rally, while the dollar strengthened amid concern this week’s gains on weak US inflation print are overdone. The MSCI Asia Pacific Index slid 0.4% with Chinese shares in Hong Kong leading the decline after home prices fell at the fastest clip since 2015, underscoring the hurdles for the world’s second-largest economy to emerge out of its economic rut. US futures dropped, effectively erasing the 0.2% gain in the S&P 500 on Wednesday.
Asian stock markets struggled for momentum on Thursday, after heavy gains this week, as expectations for a pause in Fed policy tightening remained intact despite U.S. data pointing to strength in parts of the economy.
U.S. economic data this week has left investors in the same state of confusion about Fed policy as they have been in for weeks. Retail sales proved strong while producer prices inflation, coming soon after the below-forecast core inflation, reinforced the disinflation theme and supported views of a peak in U.S. rates.
FTSE 100 technical analysis for today, 16th November 2023
A couple of tests of that key 7525ish area yesterday that we were keeping an eye on, and the bulls failed to break above it. That is the short term line in the sand, with 7550 remaining as resistance above that. We may well see a bit of consolidation today as it coils ready for another push higher, possibly tomorrow.
The 30m coral is now red and initial resistance from this is at the 7487 level to start with this morning, and just above the daily pivot at the 7478 level. We may well see a drop down off this area then, to test the 7430 support level where we have the key fib and the 30m 200ema. That also ties in with the green 2h coral, so a hold of this would bode well for a bounce, and then that climb back towards the 7530 level.
Above 7487 then 7530 as mentioned, 7550 above that, but then we would start to look at the R2 level of 7584. That may well be a bit optimistic for today though, in the absence of any significant news releases. The market will be trying to get its head round the next central bank steps given the inflation readings this week in the US and UK and as such we may well see some consolidation, especially on the S&P500, today.
On the support side, 7430 as mentioned then below that 7421 for S1, then the round number of 7400. Having done a sterling job of defending that the bulls will not really want to see the price get back down there though so will be aiming to keep the momentum going for a continued rise.
On the daily chart the Raffs are both heading up now, and we may well see an EMA cross over soon, which would lock in the 7440 area as support. Still weak at the moment though and with the 200ema on the daily at 7526 tying in with the high yesterday, that level remains strong resistance.
Not too much more to say really. Once again keep an eye on those key levels and good luck!
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