Technical analysis for FTSE 100 for 17th September 2024
London's benchmark stock indexes ended higher on Monday, led by gains in automobile and parts shares, while investors focussed on a week of key central bank interest rate decisions.
The benchmark FTSE 100 was up 0.1%; while the mid-cap FTSE 250 inched 0.2% higher. Both indexes marked gains for the third consecutive session.
The pound rose against the dollar on Monday, ahead of this week's UK inflation data and central bank meeting.
The Bank of England, which meets this Thursday, is expected to leave rates on hold and investors will primarily watch for clues on the BoE's path for the rest of the year and updates on the pace of its bond sales.
With global growth concerns back in focus, the week's key event is the Federal Reserve's monetary policy meeting on Tuesday and Wednesday. After weeks of back-and-forth due to mixed economic data, traders now see a 61% chance of a heftier 50-bps cut on Wednesday, per the CME's FedWatch tool.
Asia & Overnight
Asian stocks gained on Tuesday while the dollar and U.S. Treasury yields came under pressure, with just a day to go before the expected start of the Federal Reserve's easing cycle that could see policymakers deliver an outsized rate cut.
Extended holidays in China and South Korea made for thin trading conditions, with investors focused on Wednesday's Fed decision as odds have crept up in the past week in favour of a 50-basis-point rate cut.
That kept the dollar languishing near its lowest level in over a year against the yen at 140.64, having fallen below the 140-yen level in the previous session.
The stronger yen stoked concerns about Japanese exporters' earnings and pulled down Tokyo's Nikkei by 2% as the market returned from a national holiday on Monday.
Outside Japan, MSCI's broadest index of Asia-Pacific shares rose 0.47%. Hong Kong's Hang Seng Index advanced 1.44%.
S&P 500 futures and Nasdaq futures both eased marginally, though EUROSTOXX 50 futures tacked on 0.33% and FTSE futures gained 0.57%.
Markets are now pricing in a 67% chance that the Fed could ease rates by half a percentage point at the conclusion of its monetary policy meeting on Wednesday, after a slew of media reports revived the prospect of more aggressive easing.
Elsewhere in Asia, China's stuttering economic recovery continued to weigh on sentiment, after data over the weekend showed the country's industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further.
Still, concerns over faltering Chinese demand for oil were overshadowed by the ongoing impact of Hurricane Francine on output in the U.S. Gulf of Mexico, sending oil prices rising on Tuesday.
Brent crude futures rose 0.44% to $73.07 a barrel, while U.S. crude futures gained 0.67% to $70.56 per barrel.
FTSE 100 technical analysis for today, 17th September 2024
It took a while but the bulls managed to defend the 8250 level yesterday which sure enough saw the 8300 level. We may well see a rise and dip play out today but the bulls need to break the 8333 level now, if they are to push higher. The higher level now in play being the 8400 level. The spectre of rate cuts is helping to underpin the strength and the 10d Raff channel has now started to head up on the FTSE100.
If the initial resistance at the 8335 level holds then we may well get a dip back down to backtest the 8290 level (previous resistance becoming support) and we also have the daily pivot here to help. If this holds then some more upside may well follow from there.
A break of 8290 and the bears will be aiming for a drop down towards 8265 initially to test the green 2h coral, and we also have S1 and the 30m 200ema around here. Lower down then 8224 for S2, though with that much momentum we will probably test the 8202 daily support level. Which handily lines up with S3!
On the other hand, if the bulls break 8335 then en route to the 8400 area we have the key fib at 8349 to look for a reaction, and 8380 for the top of the 20d Raff channel.
On the news front we have USA retail sales at 1330 so expect some volatility then.
Not too much more to say really, it's slightly tentative ahead of the Fed tomorrow and BoE on Thursday. but a bit of bear Tuesday kicking in today is possible, though the 8290 level looks decent support.
Good luck today.
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