Technical analysis for FTSE 100 for 10th September 2024
London's benchmark FTSE 100 climbed over 1% amid broader gains led by travel and leisure stocks after an upbeat forecast from gambling group Entain, while investors awaited labour market data later in the week.
The blue-chip FTSE 100 ended up 1.1%, registering biggest one-day gains in a month. The mid-cap FTSE 250 advanced 0.8%, its best day in three weeks.
Investors are focused on labour market data and gross domestic product figures for the country due this week for more clues on the Bank of England's stance. The British central bank is widely expected to hold rates at its meeting later this month, while the European Central Bank is expected to cut at its meeting this week.
The rebound in global share markets proved short-lived in Asia on Tuesday, as yet another set of lacklustre economic indicators from China soured the mood and capped gains in Asian stocks.
That has set up a mixed opening in Europe, with EUROSTOXX 50 futures pointing to a positive start, while FTSE futures fell 0.3%.
Figures on British pay growth and joblessness are due later in the day just as London wakes up, where expectations are for them to point to a further easing of inflationary pressures.
That could pave the way for more rate cuts from the Bank of England, though doing so next week could surprise investors, given they are only pricing in a slim chance of 25 basis points worth of easing.
The Fed also meets next week and a 25bp cut is pretty much a done deal, so that leaves the fate of an outsized 50bp move in the hands of Wednesday's U.S. inflation report.
Turning the focus back to China, trade data on Tuesday showed exports unexpectedly picked up pace in August, but imports missed forecasts. That followed Monday's figures on consumer prices, whose rise had little to do with a recovery in domestic demand as producer price deflation worsened.
FTSE 100 technical analysis for today, 10th September 2024
Decent bull Monday yesterday but the bulls failed to break above the 8285 daily resistance level, which if they had done would have meant a test of 8320. As such the 8290 area remains the line in the sand still that the bulls will need to break. Following the bullish session yesterday we may well be on course for a bear Tuesday, and whilst we are already in it with the opening looking to be down -0.5%, it feels like shorting the rallies is the best plan for today.
Initial resistance is at the 8260 area with the 30m coral and 200ema both here, along with the 25ema on the daily. However, after yesterdays rise the 2h chart is bullish and has decent support at the 8200 level. Ergo the bears will need to break this level today to retest the recent low at 8160, and possibly even the daily support even at 8120.
With that 2h support likely to be tested and probably hold the first time, we may well see any initial dip down bounce off that and get a bit of a kick up this morning. We are also heading towards the possible ECB rate cut, BoE hold and possibly Fed cuts too which may help the bulls as we end Q3.
Also around the 8200 area we have 8190 for S1 and the key fib and lending support to the early bounce plan. S2 is way down at 8108 below that, and ties in with he 8120 daily support area. Not sure we will get that low today though..... (famous last words).
If the bulls were to break above the 8260 level then 8290 is next up with 8320 the main one to watch for again, and then above that the 8373 R2 level. I am not expecting it to get that high today though, and in fact with the ASX200 being more bearish today think we will probably follow suit.
Good luck today.
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