Technical analysis for FTSE 100 for 18th September 2023
Asian shares fell and the dollar was firm on Monday as investors looked ahead to a week packed with central bank meetings including the Federal Reserve and the Bank of Japan, which will be closely scrutinised for the global monetary policy outlook.
S&P 500 futures advanced 0.2% while Nasdaq futures edged 0.1% higher.
This week, global central banks will take centre stage, with five of those overseeing the 10 most heavily traded currencies - including the U.S. Federal Reserve - holding rate-setting meetings, plus a swathe of emerging market ones as well.
Markets are fully priced for a pause from the Fed on Wednesday, so the focus will be on the updated economic and rates projections, as well as what Chair Jerome Powell says about the future. They see about 80 basis points of cuts next year.
On Thursday, Bank of England is tipped to hike for the 15th time and take benchmark borrowing costs to 5.5%, while Sweden's Riksbank is seen hiking by 25 basis points to 4%.
FTSE 100 technical analysis for today, 18th September 2023
The FTSE100 has just about hung onto the 7700 level over the weekend, however it looks weaker to start with today. Oil has continued to rise, recession fears and further rate rises more than likely this week (Thursday for the BOE, increase to 5.5% expected) may well see some tempering of the recent rally. And tie in nicely with the seasonality which has the latter part of September being weaker.
For today we have initial resistance at the 7713 daily pivot level then the 30m coral (now red) at 7735. That also ties in with R1 here, so should we get an early kick up to here then a short here is worth a go. A kick up may well tie in with the bulls trying to defend the 7700 level to start with.
Above that then 7767 is R2 and also the 20d Raff channel top, so should in theory be fairly strong resistance and likely to get a reaction. Above that then 7805 is the next daily resistance level but that may be a big ask for today.
On the support side of things then 7700 initially purely as its the round number and held on Friday, but below that 7680 is S1 and daily support and I would like to see the bulls step up here should it get tested. Both the Raff channels continue to head up as well, as do the Dax ones, while the S&P500 10d channel is trending down.
Below that then a drop down to the 7640 level would probably play out for a second test of the green 2h coral line. It is that line that we climbed off on Wednesday last week at 7500.
If it were to get really bearish today and breaks that line then 7606 is the next key support below that. I don't think we will get that low today though.
The S&P500 2h chart has gone bearish now as well, and has 4490 as Hull MA resistance. Any rally to this area may well then see the bears kick in as well, though the drop on this on Friday wasn't mirrored on the FTSE100 so despite dropping 60 points, it may not be as bearish as it appears.
The 2h Dax chart is bullish meanwhile with Hull MA support at 15840 and the green coral at 15760ish.
Good luck today.
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7680 trying to hold!