Technical analysis for FTSE 100 for 24th September 2024
UK shares ended higher on Monday after logging their worst day since August in the previous session, boosted by rising commodity-linked shares, while drugmaker AstraZeneca fell following a disappointing experimental precision drug trial.
The blue-chip FTSE 100 closed 0.4% higher, while the more domestically-focused FTSE 250 midcap index added 0.1%
.
Precious metal miners led gains amongst the major FTSE 350 indexes with a more than 2% rise as gold prices scaled record highs, driven by Fed rate cuts and demand for the safe-haven asset on geopolitical risks in the Middle East.
Heavyweight energy shares added 0.6%, tracking elevated crude oil prices.
Meanwhile, British businesses reported a slowdown in growth this month as some firms feared higher taxes, according to a survey that also showed waning price pressures, potentially encouraging the Bank of England to consider cutting interest rates again.
Last week, Britain's consumer price inflation data - which is closely watched by the BoE for its monetary policy - pointed to persistent price pressures in the services sector.
Asia & Overnight
Asian stocks rose on Tuesday to their highest in more than two and half years, boosted by a slew of Chinese stimulus measures while expectations for more U.S. rate cuts kept risk sentiment aloft and the dollar under pressure.
In an eagerly awaited press conference, China's top financial regulators unveiled a slate of measures, saying it would cut bank reserves by 50 basis points while reducing mortgage rates to try to spur sluggish economic growth.
The moves sent Chinese stocks higher, with the blue-chip CSI300 Index opening 1% higher, while the broader Shanghai Composite index was also up 1% at the open.
Hong Kong's Hang Seng Index jumped over 2% in early trading, with the mainland properties index surging 5%.
That pushed MSCI's broadest index of Asia-Pacific shares outside Japan 0.41% higher to 588.43, levels last seen in April 2022.
Overnight, U.S. stocks closed modestly higher as traders continued to digest the Fed's big move, with policymakers explaining the need for the 50 bp cut. Markets are currently evenly split on whether the U.S. central bank will go for another 50 bp cut or a 25 bp cut in November, CME Fedwatch tool showed. They are pricing in 76 bps of easing this year.
In commodities, oil prices were slightly higher in early trading, with Brent crude futures up 0.26% at $74.09 a barrel, while U.S. crude futures climbed 0.3% to $70.6. Oil prices slid on Monday on demand worries as well as weak economic data from Europe.
FTSE 100 technical analysis for today, 24th September 2024
A decent enough bull Monday yesterday though the bears did manage to get it down through the 8230 support area, with 8208 holding to then set up the bounce. That strength has continued overnight and we could well be on for a test of the cluster of resistance levels at the 8305 area to start with. A bear Tuesday could kick in at that point for a run back down to the 8245 daily pivot then, before some more upside later. We head towards NFP on Friday, and rumours are starting of another 50bps Fed rate cut before too long. Seems a bit soon to be saying that though!
The Labour parry conference also generated some headlines as more doom and gloom get prophesied, to justify tax increases left right and centre. We even had some boos and hecklers thrown in!
If the bulls break above the 8308 resistance level today then a rise towards the recent high at 8372 is next on the cards, with the daily resistance still at 8403 above that. Feels like that's a big ask for today though! The 10d Raff channel continues to head up, despite the recent bearishness, and the top of both the 10d and 20d channels are at 8373 today. As such, if we see this level today then a short here is worth taking.
For the bears, they will be looking to break the 8245 support level, which would test 8221 S1, but more likely 8193 where we have the recent low and key fib for today. Again, if seen then a long here is worth a go.
The US markets will certainly be keen to build on the recent strength and the Raff channels for both the S&P500 and the Nasdaq are heading up, which bodes well for more upside into October. September started off weak as it seasonally does, though has since recovered quite well.
As per yesterday, if the oil price continue to tick up then that may well help the FTSE100 as well.
Good luck today.
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