Technical analysis for FTSE 100 for 19th April 2024
British equities recovered for a second straight session on Thursday supported by positive corporate updates, while the pound firmed against the dollar as traders lowered their expectations of any early rate cut by the Bank of England.
The benchmark FTSE 100 rose 0.4% for the day but underperformed its European peers.
The FTSE 250 midcap index snapped its five-day losing streak to gain 0.6%, driven by a 30.5% surge in Hipgnosis Songs Fund after Concord Chorus said it would acquire the music investor for $1.4 billion.
The pound appreciated by 0.2% against the dollar and was last trading at 1.246, while the 10-year UK bond yield ticked slightly higher to 4.273.
BoE policymaker Megan Greene said Britain's latest wage growth and services price inflation data is too high for the UK central bank to consider cutting interest rates.
Traders expect the BoE to cut interest rates by 44 basis points this year, with the first cut expected only in September.
Asia
Asian shares and bond yields sank on Friday while safe-haven currencies, gold and crude oil jumped after reports Israel attacked Iran in a continuing series of assaults that have increased concerns of a wider Middle East conflict.
However, the scope of the market moves were mitigated somewhat as details emerged the Israeli attack was limited and Iranian officials denied any missiles were launched against it.
MSCI's broadest index of Asia-Pacific shares dropped 2%, after earlier diving as much as 2.6%, and U.S. stock futures pointed 1% lower, retracing part of an initial 1.7% slide.
Iran said it shot down several drones and there had been no missile attack, after explosions were heard near the central city of Isfahan, close to several nuclear sites. Those reactors were not damaged, state TV reported. ABC News reported earlier that Israeli missiles hit a site in Iran.
Fears of an Iranian response eased after the Israeli military said that warning sirens which sounded early on Friday in northern Israel were a false alarm.
U.S. long-term Treasury yields were last down 9 basis points (bps) at 4.5567%, after earlier dropping as much as 15 bps. The safe-haven yen had rallied as much as 0.7% against the dollar , but was last up about 0.3%. The Swiss franc was about 0.6% higher versus the dollar, paring earlier gains of as much as 1.2%.
Gold added 0.6%, but was earlier up as much as 1.7% at $2,417.59, taking it just shy of last week's all-time high at $2,431.29.
Brent futures surged as much as 4.2%% on concerns Middle East supply could be disrupted, but were last up 2.4% at $89.22. Iran is the third-largest oil producer of the Organization of the Petroleum Exporting Countries, according to Reuters data.
FTSE 100 technical analysis for today, 19th April 2024
And the tit for tat continues with the news this morning that Israel, despite everyone saying show restraint, attacked Iran. Albeit in a slightly limited way. It's like a school ground fight with little slaps at the moment and jostling.... hopefully it doesn't escalate into full blown punches.
The market of course tanked on the news, but the 7750 level that we had yesterday as the ultimate support did in fact hold overnight and has seen a bounce to back above the 7800 level. I expect we will see more upside today though as the market will want to look positive and shake it off. That should see an initial climb towards the 7830 level where we have the Hull MA on the 2h timeframe, but ultimately I would like to see a test of the daily pivot at the 7869 level.
We may then see some profit taking/shorting ahead of the weekend in case Iran get another slap in fairly quickly. Above the daily pivot though and then 7893 is R1 and would probably be seen in fairly short order, with the bulls then looking to target a move above the 7900 level.
Even higher, and it might be a big ask, is then R2 and the key fib at the 7920 level - a level that would be worth shorting if it gets this high.
Support wise, then the bears would be aiming for the overnight lows and another test of the 7750 support level. However we now have 7725 also in play for today as the bottom of the 20d Raff here, along with it being the new daily support. Should it get this low then a long here is worth taking.
Higher up support to start with is the 7793 level that would likely have held if it wasn't for the war news, and as such remains in play, especially as the price has now moved back above 7800. If we test this area this morning then we may well see a bounce here.
It will be eyes on Iran now for the next move and if they take another action. It's also Friday so be slightly more cautious - this week has actually been ok trading wise and the orders have come to fruition after a poor start to April.
Good luck today and have a nice weekend.
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
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
