Technical analysis for FTSE 100 for 8th April 2024
The UK's main stock indexes recorded weekly losses on Friday against a backdrop of escalating Middle East tensions and a more cautious mood among investors following hawkish remarks from Federal Reserve officials.
The exporter-heavy FTSE 100 shed 0.8%, while the domestically focused FTSE 250 lost 0.7%. However, both the indexes picked up from their session lows after a stronger-than-expected U.S. jobs report raised hopes of a soft landing in the United States.
Markets globally were unsettled by news that Israel braced for the possibility of a retaliatory attack after its suspected killing of Iranian generals in Damascus this week, and Prime Minister Benjamin Netanyahu said the country would harm "whoever harms us or plans to harm us".
Oil prices extended gains on Friday and were headed for a second weekly gain. That in turn lifted the FTSE 350 energy sector but weighed on the travel sector. Wall Street sold off sharply on Thursday after Minneapolis Fed President Neel Kashkari said that if inflation continues to stall, no rate cuts may be required at all by year end.
Most developed world equity markets have posted strong gains since late last year on hopes that major central banks will start easing monetary policy. Investors currently expect the Bank of England to start cutting rates in June or August.
British house prices fell 1% in March, their first drop since September 2023, figures from mortgage lender Halifax showed.
Asia
Asian shares started the week on a subdued note on Monday, while the dollar firmed as investors weighed when the U.S. Federal Reserve will start cutting rates in the wake of yet another blowout jobs report.
Oil prices fell nearly 2% as Middle East tensions eased after Israel withdrew more soldiers from southern Gaza, while gold prices slumped 1% after scaling record high on Friday as U.S. Treasury yields remain elevated.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.26% higher, while Tokyo's Nikkei rose 1%. China mainland stocks reopened after extended holidays from Thursday, with the blue-chip gauge 0.5% lower. Hong Kong's Hang Seng Index rose 0.33%.
Wall Street's main indexes closed higher on Friday after data showed U.S. job growth blew past expectations in March and wages increased at a steady clip, suggesting the economy ended the first quarter on solid ground.
FTSE 100 technical analysis for today, 8th April 2024
The bulls fought back on Friday and that may well roll into a bit of a Bull Monday today for a test of the 7950 resistance area. Above that then they will be aiming for 7990 and might even manage the 8000 level.
In the absence of any major market news today then we may well see any test of the daily pivot and green 30m coral at the 7901 level hold, and this may well act as the springboard for the push higher today. The bulls will certainly be keen to pull away from 7900 again.
Below this first support the next key one is 7874 where we have S1 and the key fib, and I would like to see this hold if it were to be tested. If it doesn't then the bears will likely be aiming for the recent low at 7850 which remains also as daily support. 7841 is also the bottom of the 10d Raff. I am not thinking that it will get down to here but if it were then the bulls will definitely be trying to defend that area.
On the S&P500 the 2h chart has gone bullish and has 5183 as support. If this holds then that will help the bulls across the board and add some weight to upside for the FTSE100 today as well. If that were to break though then we will likely revisit the recent lows at the 5140 level and make or break time for the bulls there.
Above the 7950 level then 7990 likely beckons for the bulls and we also have daily resistance here. The 10d Raff channel has also started to head down once again and has the 8015 level as the top of that, which tallies with the R3 at 8020 so should we get to this area then I would expect to see a stutter here again. That said, 7950 does looks to be decent resistance to start with.
So, with a positive 2h chart and 7900 as support to kick things off today we may well see a rise and dip play out.
Good luck today.
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