Technical analysis for FTSE 100 for 14th October 2024
London stocks rounded off the week on a dour note as investors were disappointed after China failed to announce specific measures to stimulate its economy, while losses in Sainsbury's pulled the benchmark index lower.
The blue-chip FTSE 100 ended 0.2% higher on Friday, but recorded 0.3% declines for the week, while the midcap FTSE 250 fell around 1% for the week.
Stocks took little comfort from data that showed Britain's economy grew in August after two consecutive months of no growth.
Economic output rose by 0.2% in monthly terms in August, in-line with economists' expectations, and was likely to reassure Finance Minister Rachel Reeves ahead of the new Labour government's first budget.
Asia & Overnight
Asian stocks swung between gain and loss on Monday as investors struggled to reach a consensus view on China's economic stimulus promises made over the weekend which, though broad, were light on specifics.
Trading in Asia was thinned on Monday with Japan out for a holiday. U.S. stock futures similarly edged lower, with S&P 500 futures losing 0.1% while Nasdaq futures fell 0.25%.
EUROSTOXX 50 futures and FTSE futures eased 0.08% and 0.05%, respectively.
Also in a blow to China's growth outlook, consumer inflation unexpectedly eased in September while producer price deflation deepened, data on Sunday showed.
Reflecting the lingering concerns over the Chinese economy, the onshore yuan slipped 0.11% to 7.0743 per U.S. dollar, while its offshore counterpart fell by a greater extent of 0.2% to 7.0828 per dollar.
Oil prices also fell by more than $1 a barrel on Monday on worries about waning Chinese demand for the commodity.
Brent crude futures were last down 1.32% at $78.00 a barrel, while U.S. West Texas Intermediate crude futures fell 1.3% to $74.58 per barrel.
Traders have priced out any chance of a 50-basis-point rate cut from the Fed in November after data last week showed consumer prices rose slightly more than expected in September and recent economic releases have also underscored strength in the labour market.
Sterling fell 0.13% to $1.3050 while the euro eased 0.11% to $1.0923.
A reading on UK inflation is due later this week, as is an interest rate decision from the European Central Bank.
Looking ahead
The mixed picture across Chinese markets on Monday has set a negative tone for Europe, where EUROSTOXX 50 futures and FTSE futures both fell around 0.1% each.
The week also brings a raft of data from China, including the country's third-quarter growth figures on Friday, so there will be lots for investors to chew on in the coming days.
China aside, a rate decision by the European Central Bank is due on Thursday, where expectations are for policymakers to deliver a 25-basis-point rate cut. UK inflation data is due on Wednesday.
Remarks from the Federal Reserve's Neel Kashkari and Christopher Waller are expected later on Monday, and there is strong interest in what they might say about the central bank's rate outlook.
FTSE 100 technical analysis for today, 14th October 2024
Looking to be a fairly calm start after the weekend with the daily pivot acting as initial support at the 8242 level. That also ties in nicely with the now green 2h coral support at 8236, so an early defence of this area by the bulls would work well, for a rise towards the 8280 resistance area where we have R1.
If the bears are quick out the blocks though and we see an early break of the daily pivot then a slide down to the 8219 S1 and daily support level at 8220 is likely. Should we see this then a long here is worth a go for a possible attempt at the bull Monday and to defend the 8210 level that we saw on Friday.
Lower still the 8150 area is next up and one to keep an eye on.
Resistance wise, then the bulls will want to break 8300, where we have R2 and the key fib. A move above that would likely lead to a test of the 8227 daily resistance level which is the area that has capped a lot of the bullish charges so far this month, and as such would likely see yet another defence by the bears.
Both the Raff channels are heading down again, with the top of both of them around the 8335 area, so again adding weight to this level as resistance. Should we see this area today then a short here is also worth a go.
Quite light on the news front as well today with Wednesdays CPI being the next main one to look for... as well as the end of month Budget looming closer....
So, a few key levels to look for with a possible range between 8230 and 8300 today. Will we get a bull Monday?!
Good luck today.
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