Technical analysis for FTSE 100 for 5th December 2023
The FTSE 100 eased on Monday from a more than one-month closing peak, as heavyweight energy and mining stocks fell after a stronger dollar and concerns about China's economy dragged down oil and metal prices. The commodities-heavy FTSE 100 slipped 0.2%, after closing on Friday at its strongest level since Oct. 19.
After broad market gains in November on hopes that the U.S. Federal Reserve is done hiking interest rates, investors are awaiting a slew of U.S. employment reports this week to gauge when the U.S. central bank is likely to start cutting rates.
Meanwhile, the Bank of England will make its next policy announcement on Dec. 14, with markets almost unanimously betting on no change.
Asian stocks slid as traders dialed back bets that the Federal Reserve will aggressively cut rates next year and as an extended selloff in China hurt sentiment. The dollar held gains. An index of the region’s stocks was on pace for a third daily drop, with benchmarks in Hong Kong and Japan sliding the most. US futures also edged lower, following Monday declines when the S&P 500 fell from the highest since March 2022.
Asian stocks slipped to three-week lows on Tuesday while bonds and the dollar steadied as investors tempered expectations for cuts to U.S. interest rates and waited on U.S. jobs data.
FTSE 100 technical analysis for today, 5th December 2023
The bulls tried to hang in there yesterday but we look set for a bear Tuesday today, with the break of 7500 getting stronger. Short the rallies today! The 2h chart has gone bearish overnight and has decent resistance at the 7510 level, which also aligns with the daily pivot and the 30m coral (second test of this though as we dropped off it after the bell yesterday at 7525).
Initially we may well see the bulls have a bit of a go to get the price back towards the 7500 level, but generally it looks like we will see a slide down to test the 7450 support level. With 7452 as the key fib, and 7444 S2 also in this area, I would like to see this hold, especially if we get an early break of the 7480 2h coral line.
7464 is also the 25ema on the daily chart, though not the first test of that. Ergo we may dip a little bit below that.
At 15:00 today we have US PMI data out so expect a bit of movement then - forecast is a slight increase to 52 from 51.8 previously. So possibly a bit of positive news from that.
Below 7443 then the bears will be aiming for the 7400 area - we have both the Raff channel bottoms in this area so I would expect to see it hold, at least on the first test. The Raff channels are both still heading up as well, and the S&P bulls will more than likely want to go for the all time high which is tantalisingly close. Ends 2023 strongly as well... The Nasdaq and S&P500 are also both nearing the bottom of this Raff channels, with the former nearly testing its 25ema daily support at 15655.
If the bulls were to pull it out of the bag today and break above the 7510 level then a rise towards 7553 would be likely, with a test of the key fib here. 7538 is also R1, though its worth noting that the ASX200 (Australia) had a dip and rise play out and we may well do the same with this initial early break of the 7500 level.
Good luck today.
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