Technical analysis for FTSE 100 for 24th July 2024
Britain's FTSE 100 closed lower on Tuesday, pressured by commodity-linked stocks which tracked declines in prices of oil and copper, while positive earning updates from companies helped offset declines.
The blue-chip FTSE 100 index was down 0.4%, after logging its best session in over a week on Monday. The mid-cap FTSE 250 was down 0.2%.
Asian stocks were subdued on Wednesday after lacklustre earnings from U.S. tech behemoths Tesla and Alphabet dented sentiment, while the yen hit a six-week high ahead of a central bank meeting next week where a rate hike remains on the table.
The U.S. dollar was broadly firm, with traders watching out for an inflation reading on Friday and Federal Reserve meeting next week. The Bank of Japan is also due to meet next week, where a 10 basis point hike is priced at a 44% chance.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.08% lower at 566.26, not far from the one-month low of 562.43 it touched on Monday.
Japan's Nikkei fell 0.23% while Taiwan financial markets are closed due to a typhoon.
Nasdaq futures fell 0.5%, while S&P 500 futures eased 0.36% after Tesla reported its smallest profit margin in more than five years. Shares of Google-parent Alphabet slipped in after-hours trade even after the firm beat revenue and profit targets.
Chinese stocks were lower in choppy trading, with the Shanghai Composite index down 0.18%, while the blue-chip CSI300 index was 0.19% lower after recording its largest one-day decline since mid-January on Tuesday.
Investor sentiment remained fragile in the world's second-biggest economy despite stimulation efforts.
On the macro side, investors await the U.S. GDP data on Thursday and PCE data - the Fed's favoured measure of inflation - on Friday to gauge the expectations of interest rate cuts this year.
Markets are pricing in 62 basis points of easing this year, with a cut in September priced in at 95%, the CME FedWatch tool showed.
A growing majority of economists in a Reuters poll said the Fed will likely cut rates just twice this year, in September and December, as resilient U.S. consumer demand warrants a cautious approach despite easing inflation.
Investor focus on Wednesday will also be on purchasing managers' index figures across the globe to gauge the health of economies.
In commodities, oil prices rose on falling U.S. crude inventories. Brent crude futures for September rose 0.25% to $81.21 a barrel, while U.S. West Texas Intermediate crude for September gained 0.26% to $77.16 per barrel.
FTSE 100 technical analysis for today, 24th July 2024
Certainly got the dip rise dip play out yesterday and we may well see a rise and dip today. We are just about testing the initial support level to start with at the 8125 level with S1 and the key fib here, though a test of that 8105 daily support may well materialise today. If it does then I would like to see a bounce here, and a rise towards the 8178 daily pivot level would make sense.
Rumours still of an imminent rate cut by the BoE under pressure from the new government, rumoured as early as August so a bit before my expected November one! We shall see.... BoE is supposedly "independent" anyway.....
Below the 8105 level then then 8090 area also looks quite key with S2 here, but also more importantly the bottom of both the Raff channels - though the 10d Raff has resumed its downward trend following the failed bounce sticking this week.
Lower down then 8041 is S3 though I don't think we will get that low today, at least not in hours. We have Flash PMI data out at 0930, which may well show a small uptick in a positive sign and helping the bulls today.
Resistance wise, then 8178 is the daily pivot and the main area to keep an eye on, with the 30m 200ema also here. 8185 is also the 2h coral (now red) and 8180 is the Hull MA - so a cluster of resistance levels here.
A break above this and then 8209 is R1 and 8228 for the key fib, though that might be a bit too much to ask for today to see either of these.
Generally therefore I am looking for a rise and dip to play out. We have climbed off the 8120 area as well a few times this month, with 8105 being the bounce point on the 2nd July. As such another bounce does make sense, just depends on the bulls eagerness!
Good luck today.
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