Technical analysis for FTSE 100 for 3rd September 2024
UK's main stock index ended lower on Monday, weakened by a sell-off in aerospace-defence and personal-goods shares, while real estate shares surged on a bid for property portal Rightmove, capping losses.
The blue-chip FTSE 100 index fell by 0.2%, after hitting a three-month high Friday and logging its third straight weekly rise.
British factories enjoyed their strongest month in more than two years in August as demand at home offset a fall in exports.
The Bank of England is expected to keep interest rates on hold this month before cutting them in November for only the second time since 2020.
A PMI for the dominant services sector is due on Wednesday, while producer prices and retail sales are some of the key data on investors' Europe watch list.
U.S. employment data, including the payrolls report for August, could help determine the size of an all-but-certain September interest rate cut by the Federal Reserve.
September jitters
US markets are set to return from a holiday to kick off September, which has traditionally been a terrible month for traders, with the S&P 500 Index suffering its biggest percentage loss since 1950 in this month. And investors may need to prepare for stormier weather this time ahead of a report on the American job market due on Friday. That’s expected to show hiring and wage growth accelerated in August, which could cast doubt over the quarter-point Federal Reserve interest-rate cut that traders are pricing for September.
Asia & Overnight
Bond yields drifted higher on Tuesday, while currencies and Asia's stock markets steadied as investors waited on a raft of data to determine how deeply the U.S. can cut interest rates.
Ten-year Treasury yields were slightly higher at 3.919% and two-year yields rose a basis point to 3.935% as trade resumed in Asia following a U.S. holiday overnight.
Upbeat spending figures on Friday led markets to trim the chance of a half-point easing from the Federal Reserve. The U.S. ISM manufacturing survey due later in the day and particularly jobs data due on Friday will be crucial for the Fed's decision.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked 0.1% lower. Japan's Nikkei rose 0.7% and S&P 500 futures were flat. The dollar has steadied along with U.S. yields as focus turns to Friday. On Friday analysts are looking for a rise of 160,000 in jobs and a dip in the unemployment rate to 4.2%.
Oil prices have struggled for traction as demand worries weigh against tension in the Middle East and Brent crude futures slipped 0.5% to $77.13 a barrel.
FTSE 100 technical analysis for today, 3rd September 2024
Bear Tuesday but the US is back after their day off so we may well see a rise and dip today as well. The FTSE100 looks like it might manage to get as high at 8425 today, which would also set up a double top with the recent high, as well as test R2 and the key fib here.
Support wise, the 8350 level is first up and has held overnight so we could see a spring up of this, and it's also a double bottom with yesterday, along with S1 at 8345.
Slightly lower, we have S2 at 8321 which also links in with the bottom of the ascending 10d Raff channel, so should we dip down to this then I would like to see a bounce here. With yesterday's weakness from the 8400 level the 2h chart remains bearish and still has 8395 as Hull MA resistance. As such this level is the key one that the bus will need to break today for a push towards that 8425 level.
Higher up if they manage to surpass that we are looking at a possible test of the 8455 level, and just above R3 for today. We may well see some bullishness today as the US returns from their public holiday.
The main news event for today is the US ISM Manufacturing PMI at 15:00, forecasted to have crept up slightly to 47.5 from 46.8 previously.
Zooming out, if the bears were to break below the 8321 level then 8293 is S3 and that one aligns with the 25ema on the daily chart and would be the first official test of that MA support line. We have got close on a few prior occasions which have seen some decent bounces so we could see another. It's also the round number.
So thinking a rise and dip and then bear Tuesday to kick in later on.
Good luck today.
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