Technical analysis for FTSE 100 for 5th September 2024
Asian stocks trimmed their gains and US stock futures slid as traders awaited this week’s US payrolls data to gauge the extent of the Federal Reserve’s easing.
The MSCI Asia Pacific Index erased most of its 0.8% gain. Japan’s Nikkei 225 index fell more than 1%, while benchmarks in Hong Kong and South Korea turned lower. Taiwan’s Taiex index jumped more than 1%, led by a rebound in the shares of chipmakers.
Britain's main stock index ended lower on Wednesday, led by a drop in personal goods and homebuilder stocks, while investors assessed crucial UK and U.S. economic data ahead of interest rate decisions by central banks in coming weeks.
The blue-chip FTSE 100 index was down 0.4%, touching its lowest levels in three weeks earlier in the session. The domestically-focused mid-cap FTSE 250 ended flat, after its biggest drop in almost a month.
On the data front, a survey showed Britain's services activity grew last month at the fastest pace since April and price pressures eased, pointing to a more benign inflation outlook and a settling of the economy after July's election. U.S. job openings dropped to a 3-1/2-year low in July, suggesting the labour market was losing steam, but probably not enough for the Federal Reserve to consider a big interest rate cut this month.
Asia & Overnight
Asian share markets tried to regain their footing on Thursday after a steep sell-off, while a rally in Treasuries dented the dollar and lifted the yen as U.S. economic worries raised the odds of the Federal Reserve going big on rate cuts.
Oil prices were steady in early trading after dropping in the previous sessions on weak demand and supply woes, while gold edged higher.
In a data-packed week, investors are poring over the reports dropping in to gauge the health of the U.S economy and the labour market, with a weak manufacturing data on Tuesday and Wednesday's mixed labour data keeping markets on edge.
Japan's Nikkei fell 0.5% to its lowest in three weeks, although tech-heavy Taiwan and South Korean stocks were both 1% higher after sliding on Wednesday.
That helped lift MSCI's broadest index of Asia-Pacific shares outside Japan by 0.6%, having tumbled nearly 3% over the course of a three-day losing streak.
Investor attention on Thursday will be on a reading on the U.S. services industry with jobless claims data. The main focus for the week though will be on Friday's hotly anticipated August report for nonfarm payrolls.
The payrolls report is expected to provide the clearest clues as to where the economy is headed and whether the Fed will cut interest rates this month by a quarter or a half of a percentage point.
In commodities, Brent crude futures rose 0.45% to $73.03 after dropping 1.42% in the previous session. U.S. West Texas Intermediate crude futures were up 0.52% to $69.56 after sliding 1.62% on Wednesday.
FTSE 100 technical analysis for today, 5th September 2024
Nice bounce off the 8204 support level yesterday, however it ran out of steam at 8280 and has dropped back. Continue to trail the stop on that long, currently 8220.
For today we may well see another attempt and a rise towards the 8300 level. There are a cluster of resistance levels here though, namely the key fib and the 200ema, so we could see the bears appear here later this morning.
The 30m chart has a green coral to start with and support at the 8245 level. This ties in with the daily pivot also, at 8246, so we may well see an early hold of this. If the bears manage to break 8240 though then 8211 is S1, 8200 round number and a double bottom with yesterday would be the next key area.
Below that 8184 is the key fib and it will all be looking more bearish again as the traditionally weak September plays out.
That said we may well see some strength and a hold of the pivot area. If the bulls break above the 8303 level then 8324 R2 ties in with a first test of the red 2h coral line, and may well see a drop back from there. That might be a tough nut to crack today if tested. 8366 above for R3 and the mid point of the 20d channel.
The 10 day Raff channel has also started to head down following the weak start to the month, so the bulls are now slightly on the back foot. Across the board though the 30m charts are indicating an initial rise, so the open looks to be fairly key today.
We have a few news items out today as well, with the US jobs data at 1315 and 1330 likely to be closely watched. Expect some volatility around this.
Good luck today.
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