Technical analysis for FTSE 100 for 7th November 2023
The FTSE 100 never strayed more than 41 points from its starting position yesterday, closing 0.03 points up at 7,417.76. Funnily enough it looked like the 7400 to 7440 range was all that was going to happen when I did the analysis yesterday morning and that sure enough played out.
Inflation in Britain will soon fall in line with the lower levels seen in the rest of the world, the Bank of England’s Chief Economist Huw Pill has said. Mr Pill said there will be a “sharp further fall” in inflation rate to below 5pc in October, making Britain’s rates closer to those in the eurozone and the US.
Equities in Asia declined as fresh doubts emerged on whether the Federal Reserve has finished tightening policy. The dollar advanced. An Asian equity benchmark was set to snap a four-day winning streak as major indexes traded lower. South Korea’s Kospi Index fell over 3% after jumping by the most since 2020 on Monday following a renewed ban on short-selling. Contracts for European and US stocks slipped.
Asian stocks snapped a three-day winning streak on Tuesday, as investor enthusiasm about a peak in global interest rates started losing steam, while the Australian dollar fell after a rate hike came with a shift in tone from the central bank.
FTSE 100 technical analysis for today, 7th November 2023
We may well get a break below the 7400 level today for a bit of Bear Tuesday to play out, and a slide down to test the 7360 support level. That would fit quite well as the 2h chart remains bearish as the slide from the 7440 level continues.
The Nasdaq and S&P500 daily charts have gone bullish now, for the first time in a while, and have support at 14810 and 4290 respectively, so a drop down to test that 25 EMA support line and bounce back during November would fit well. That may actually tee up the Santa Rally as well. The FTSE100 daily chart EMAs are not bullish yet, but the 10d Raff is now firmly heading up so mirroring the US markets and a stronger year end would still fit.
Initially today 7400 is support and we have S1 at 7396. A break of this will likely see a slide to the 7360 level and I would like to see this hold, as it's also just below S2 at 7372. Lower down than 7345 is S3, but if the bears were to really start going for it, then a slide down to 7310 to test the bottom of the 10d Raff may play out. That feels a bit too pessimistic for today though, especially if inflation does fall further as Huw Pill of the BoE was inferring yesterday.
Resistance wise, then 7422 is the daily pivot, with 7453 the Hull MA on the 2h above that for today. I have just taken a bit more off the short at 7404, and the stop is at break even on the remainder. 7447 is R1 so aligning with that Hull MA, and we may well see the bears appear again in the area.
Above this then the 7473 R2 and daily resistance level is next up, and worth a short here if it were to get that high.
On the news front, Israeli PM Netanyahu says Israel is open to "short pauses" in Gaza, but ruled out a ceasefire. Meanwhile the RBA hiked its Cash Rate by 25bps as expected to 4.35% from 4.10%, while forward guidance saw a dovish tweak. Despite initially dropping, the ASX200 bulls fought back and its ended fairly flat.
So 7400 remains key today, and watch for 7360 below that. 7422 then 7450 and 7474 resistance.
Good luck today.
Interested in how to start trading the FTSE 100? Frequently Asked Questions on Spread betting - Read more here
Recommended Broker for FTSE 100 trading and how to start trading using support and resistance
IC Markets - offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership, Trading Tips, Support and Resistance Levels with Live Trading
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE 100, DAX40, Gold and S&P 500.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and group membership for discussion and realtime trade updates