Technical analysis for FTSE 100 for 21st November 2023
The FTSE 100 closed down 0.11pc at 7,496.36, while the FTSE 250 rose 0.17pc to 18,599.05.
The Bank of England will not cut interest rates next year, City economists have predicted, as inflation is expected to remain persistently high. Money markets think that the Bank of England will begin cutting interest rates by June next year after inflation fell by more than expected to 4.6pc in October.
Asian stocks advanced Tuesday, buoyed by gains on Wall Street, as US shares extended their rally and a $16 billion sale of 20-year Treasuries lured bond buyers. The dollar extended losses.
Asian shares climbed to fresh two-month highs on Tuesday, taking cues from a rally on Wall Street while the dollar languished near its lowest in two-and-a-half months on expectations the U.S. Federal Reserve is likely done with interest rate hikes.
Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and some have started pricing in rate cuts as soon as March, according to the CME Group's FedWatch tool.
FTSE 100 technical analysis for today, 21st November 2023
Didn't quite manage the 7460 test yesterday but bounced just above that 7470 and in fact that has also locked in as support for today with the S1 and 200ema (30m) supports here. As such, we may well see an initial drop down to that before a climb then some Bear Tuesday kick in later. The US is closed on Thursday for Thanksgiving, hence the slightly lacklustre action so far.
Below the 7470 level then the bears will be aiming for a test of the 7450 level where we have the 25ema on the daily, and I would like to see that hold as that chart has now gone bullish. A test and hold of that would likely spur the rise towards year end as well. If it breaks though and doesn't get a bullish reaction then the bears will be seeking to build on that and a drop down towards the 7409 level would be next. It would probably drop down to there quite quickly.
That said the sentiment feels more bullish at the moment, and the S&P500 certainly pushed on well yesterday and a strong showing overnight from Asian markets.
The initial resistance today is at the 7520 area once again - Fridays high and also R1, along with the daily 200ema. As such we may well see a drop off from here again. The bulls were a bit poor at holding the price above the 7500 level yesterday as well.
Above 7525 then 7540 is the next key level with the fib here, and then 7560 for R3. The daily Raff channels continue to head up, and once the 7525 level breaks I think we will see the bulls get stronger.
A bit of a bear Tuesday therefore today I am thinking, which would sort of follow the rise and slow dip we have seen on the ASX200 today.
We have the FOMC minutes out at 7pm as well, whilst tomorrows dividend is 9 points.
Good luck today.
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