Technical analysis for FTSE 100 for 13th August 2024
London stocks kicked off the week on a positive note on Monday, supported by resources-linked shares amid rising oil and metal prices, while BT Group shares surged after India's Bharti took a stake in the telecoms firm.
The blue-chip FTSE 100 index was up 0.5% at close, while the mid-cap FTSE 250 index gained 0.3%.
Both indexes clocked a second straight week of declines on Friday amid volatility in global equities triggered by fears of a U.S. recession following a weak U.S. labour market data.
Figures due this week are inflation, gross domestic product and wages data out of the UK, as investors anticipate the Bank of England's next rate cut.
July's U.S. consumer price index and retail sales data due this week will also be on the investors' watch list, which could influence the Federal Reserve's stance on interest rate cuts in September.
- APAC stocks followed suit to the mixed lead from the US ahead of key data.
- European equity futures indicate a firmer open with the Euro Stoxx 50 future up 0.3% after the cash market finished with losses of 0.1% on Monday.
- DXY is steady just above 103, havens lag vs. the USD, whilst risk currencies outperform.
- White House's Kirby said the timing of Iran's attack on Israel could be this week and they have to be prepared for what could be significant attacks.
- Looking ahead, highlights include UK Unemployment, German ZEW, US PPI, Comments from Fed’s Bostic, Supply from UK & Germany
Asia & Overnight
Asian stocks rose on Tuesday, led by Japanese shares on the back of a steady yen, with traders awaiting data including the U.S. inflation report to gauge the Federal Reserve's policy outlook after volatile moves last week.
Oil prices eased in early trading after a 3% jump in the previous session as investors kept an eye on widening conflict in the Middle East that could tighten global crude supplies. Demand for safe assets lifted gold prices.
Japan's Nikkei rose more than 2% in early trading following a holiday on Monday, a welcome relief after last week's wild swings that began with a massive sell-off spurred by a rising yen and fears of a U.S. recession.
MSCI's broadest index of Asia-Pacific shares outside Japan was slightly higher at 556.19. Chinese stocks were little changed in early trading, while Hong Kong's Hang Seng Index was also flat.
Investors' focus this week will be on a slew of U.S. economic data that will help sharpen the view on the Federal Reserve's next moves, with markets now evenly split between a 25 basis points cut or 50 bps cut at the next meeting in September.
Traders are pricing in 100 bps of cuts this year.
Surprisingly soft payrolls data stoked U.S. recession worries that kicked off the market meltdown at the start of last week, but by the end of the week strong U.S. data helped allay fears of a global slowdown, and stocks recovered.
Markets could move later in the day when U.S. producer price data for July is due, as the figures feed through to the core personal consumption (PCE) measure favoured by the Fed.
Any hints from the PPI of soft inflationary pressures could cause financial markets to double down on wagers the Fed will sharply cut rates this year, which would weigh on the dollar, said Kristina Clifton, a senior economist at Commonwealth Bank of Australia.
On Wednesday, U.S. consumer price index data for July is due and is expected to show that month-on-month inflation ticked up to 0.2%. Retail sales data is scheduled for Thursday.
FTSE 100 technical analysis for today, 13th August 2024
Fairly flat bull Monday yesterday as it catches its breath after the recent dip and rise while I have been away - why does it always do that when I leave it unattended for a week or 2!?! 🙂
Initial support today is at the daily pivot at the 8211 level and the bulls will be keen to try and keep the price above the 8200 level again, as a break below that will likely lead to a test of the 8160 area where we have S2 and the key fib.
We also have the 8175 level as the 30m 200ema and with a bullish 2h chart (supports on that timeframe at the 8210 and 8150) we may well see any initial dips defended. As such a dip, rise, dip may well play to as some bear Tuesday sentiment kicks in later on.
Figures due this week are inflation, gross domestic product and wages data out of the UK, as investors anticipate the Bank of England's next rate cut. July's U.S. consumer price index and retail sales data due this week will also be on the investors' watch list, which could influence the Federal Reserve's stance on interest rate cuts in September.
With this data imminent it's also why traders were keeping their powder dry at the moment and we may well see some more of that today, with a fairly small range.
Resistance wise for today, first up is the 8261 area where we have R2 and the key fib, and would be an overshoot of the R1 and overnight high at 8240. If the bulls were to break this, and it's possible if we do get a decent bullish morning, then the 8290 area looks ripe for a short, as we have daily resistance at the 8287 level, and R3 8290.
If we do get a test of this level then a short here is worth taking.
Good luck today
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