Technical analysis for FTSE 100 for 11th October 2024
US inflation was higher than expected in September amid increases to food costs, but the annual increase in the consumer prices index (CPI) was the smallest in more than three and a half years.
The CPI slowed to 2.4pc in September from a year ago, down from 2.5pc in August, the US Labor Department said. Economists had predicted a 2.3pc rise.
The UK's main stock indexes slipped on Thursday as some of the companies traded without the entitlement of their dividend pay-outs, while GSK shares jumped following the settlement of its lawsuits in the United States. The blue-chip FTSE 100 index was down 0.1%, while the mid-cap FTSE 250 fell 0.6%.
Precious metal miners emerged as the top gainers of the session, rising 2.7%, after gold prices climbed as traders added to bets that the Federal Reserve will deliver another rate cut next month following the latest U.S. data.
The U.S. consumer price index (CPI) rose higher-than-expected at 0.2% in September on a monthly basis, keeping the bets intact for a 25-basis-point rate cut by the U.S. central bank.
Back home, Britain's housing market recovered further last month, with house prices, sales and enquiries rising, but pressure on the rental sector intensified as tenant demand continued to outstrip the number of available homes to rent.
Friday's session brought a cautious mood to the markets, ahead of a smattering of data and an uncomfortable weekend.
China's finance minister has called a fiscal policy briefing for Saturday against a backdrop of high expectations and jittery trade. Investors and, as of Thursday, Swedish furniture shop IKEA want fiscal stimulus to reinvigorate the economy.
Markets are expecting Beijing to announce 2 trillion to 3 trillion yuan ($280-$420 billion) in new spending, and worries about whether it will deliver - after a similar disappointment from policymakers' briefing early this week - had Chinese equities falling on Friday.
On the geopolitical front, Israel is mulling its response to an Iranian missile attack, and a retaliatory strike on oil or military targets would likely draw a sharp reaction in financial markets.
Investors in Asia were taking chips off the table. Chinese stocks are set for a weekly drop as follow-up details on promises to support the economy have so far underwhelmed. Hong Kong markets were closed for a holiday on Friday, leaving the Hang Seng nursing its largest weekly drop in two years as investors hit pause on one of its sharpest ever rallies. Gold was creeping higher.
British monthly GDP data is due in the European session and, while it is hard to really gauge growth from monthly figures, signs of strength in the services sector may have investors dialling back expectations for interest rate cuts.
Markets price about a 3/4 chance of a 25 basis point rate cut in November, while opinions at the Bank of England itself are also divided.
U.S. producer prices data is also due and will frame expectations for the Federal Reserve's preferred PCE measure out later in the month. Slightly stronger-than-expected inflation in September has, for now, knocked out market expectations of anything more than a 25 bp interest rate cut at the Fed's November meeting.
FTSE 100 technical analysis for today, 11th October 2024
To kick things off today we have the GDP news which shows that we grew by 0.2pc during August, according to the Office for National Statistics (ONS). The expansion follows two months of zero growth experienced in June and July, and was in line with analyst forecasts.
As such I am thinking that we will get a dip and rise play out this morning and a test and hold of the 8220 level would fit the charts well. Ahead of the weekend we may well see some profit taking late on though as a cautious air pervades, and mimicking the end of the Asia session.
We are just on the daily pivot to start with as well though the Raff channels are just starting to turn down again, but with the 2h chart still bullish and the Hull MA at 8229, I would like to see dips defended, at least this morning.
A break of 8220 and then the next key level to look for is 8190 where we have the key fib and S2, with 8146 below that for daily support. I don't think that it will be that bearish though but bear those levels in mind.
For the bulls meanwhile, 8282 R1 is first up and also the daily coral, albeit green still. Should the bulls break this then 8327 remains the line in the sand though again, that feels a big ask for today. I think some profit taking ahead of the weekend and being risk off would make sense. There is of course still the risk of further escalation in the Middle East with Iran still in Israel's cross hairs.
The S&P500 looks like it may also get a rise and dip today and I am looking at the 5812 level as key resistance. For the Dax40, a similar pattern with a rise towards the 19312 area and a hold of any drop down to 19150. For the Dax40, the past 2 tests of the Hull AM have resulted in a bounce and that level is 19200 to start with today. That might prevent the bears taking it lower but the third test of a support does "usually" break.
Good luck today and have a great weekend.
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