FTSE 100 technical analysis for 22nd August 2023
Britain’s blue-chip index closed at a six-week low after poor industry data and a major profit warning dragged down the UK’s largest housebuilders. The FTSE 100 closed down 0.06pc to 7,257.82, reversing all opening gains from the morning’s rally.
Treasury yields hit new decade highs in Asia on Tuesday as traders grew wary of how long interest rates might need to stay elevated, with the higher risk-free rate putting a dampener on stocks even as beaten-down Chinese markets attempted a rebound.
S&P 500 futures fell about 0.2% in early trade.
The selloff in bond markets is catching investors’ eyes since it has no obvious trigger and has not come with major shifts in inflation expectations, meaning that “real” yields, which discount inflation expectations, have surged.
FTSE 100 technical analysis for today
The bulls tried to break above the 7300 level yesterday but failed and we saw the drop back to the 7250 support for a small bounce. As such, the range for today is 7250 to 7320 and we will need to break one way or the other. I expect we may well see a bear Tuesday as we also have the 30m 200ema and key fib for today at the 7320 level.
If the bulls are able to push past the 7320 level then the next one of note is the 7355 level where we have the next daily resistance level and ultimately, as mentioned yesterday, the 7450 area for the 25ema on the daily. We now also have a red daily coral with resistance at the 7492 level. I don't expect to get this high today but if the Nvidia results tomorrow are good then a more bullish end to the week is likely.
Below the 7250 support then a drop down to the 7220 area to test the Hull MA, and 7225 for the key fib. 7210 is also S2.
The Raff channels continue to head down and a test of the top of the 10d Raff at 7330 would also fit the chart well.
For the Dax, a rise towards the key fib at 15752 looks possible for today, where upon a drop down to the daily pivot may well play out.
The S&P defended the 4360 level well after testing the 2h support here, and also looks like it will try to get 4420 today for the key fib and the R1 level (just a bit lower at 4415).
Last weeks bearishness should start to dissipate I think to end the month a bit more positively, and I would like to see the FTSE100 rise to test the 7450 level before too long.
Good luck today.
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