Technical analysis for FTSE 100 for 22nd September 2023
Chinese stocks rallied Thursday, running against the grain of declines across the region, while the 10-year Treasury yield drifted lower after touching the highest level in 16 years. Shares in Japan, Australia and South Korea fell while those in mainland China and Hong Kong rose, capping a run of daily declines. Tech stocks were well bid in Chinese markets, with the Hang Seng Tech index up as much as 2.6%.
Stocks eyed their worst week in a month on Friday and Treasuries hit decade lows as investors hunkered down for U.S. interest rates to stay high for some time, while the yen was pinned near an 11-month trough after the Bank of Japan left short-term rates below zero.
The Fed held rates this week, but traders heeded its pushback on bets for swift cuts in 2024 and were sellers along the U.S. yield curve.
Fed members lifted their median projection for the funds rate in 2024 by 50 basis points to 5.1% and traders shaved about 15 bps from implied futures pricing, which has rates at 4.7% at the end of next year.
Central banks in Sweden and Norway announced 25 basis-point hikes with the prospect of more to come.
Yet the Bank of England, in a split decision, left rates on hold for the first time in nearly two years, sending sterling to a six-month low, while the Swiss franc fell sharply after a surprise hold on rates from the Swiss National Bank.
FTSE 100 technical analysis for today, 22nd September 2023
The BoE held rates yesterday and after the initial spike up to 7740 we got the decline to retest the 7640 support level. That is support for today's session as well, and a break of that would likely see a test of the next daily support and S1 level at 7604. I am not sure that we will get that low and in fact we may well see a bit of a bounce across the board today.
The sell off this week has been fairly aggressive in the US and as such, we may see a few brave bulls try and pump it up a bit. The tech sell off yesterday may have got a bit ahead of itself as well.
Initial resistance for the FTSE100 is at the daily pivot at the 7675 level and if the bulls can break above this then a rise towards the 7720 area to test R1 and the key fib early on may well play out. Ultimately I am thinking that we may well see a test of the 7747 daily resistance level to see a double top with yesterday's high, and a bearish reaction here once again.
If the bulls were to really go for it, and being a Friday they are likely to be a little bit more cautious (and the bias is still bearish for this second half of September) then 7800 would be the next key area. That feels a big ask for today though.
The daily chart still has decent support down at 7550 with the 200ema here, along with the 25ema and a test of this to then set up a bullish October would certainly fit the chart well. We probably won't shed 100 points today, but may well see a test of those moving averages next week.
A possible bullish relief bounce on the S&P500 and Dax40 also looks like it may play out wit a rise to test the 4380 and 15650 areas. Likewise for the NASDAQ, we may well see a climb towards the 14875 area, if they can break the pivot at 14774.
Good luck today and have a great weekend.
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Certainly got the bounce and the long order off 7642 for members has worked well today