Technical analysis for FTSE 100 for 9th September 2024
UK's main stock index ended lower on Friday, dragged down by personal goods and automobile shares, while investors assessed U.S. jobs report data to determine the extent of expected interest rate cuts by the Federal Reserve.
The blue-chip index FTSE 100 fell 0.7%, marking its sixth straight daily decline and lost 2.5% for the week, its steepest weekly loss since mid-January.
However, it has fared better than its benchmark European and U.S. peers on a weekly basis, with the STOXX 600 and the S&P 500 down 3.6% and over 4%, respectively.
U.S. employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labour market slowdown continued and probably did not warrant a big interest rate cut from the Federal Reserve this month.
CME Group's FedWatch Tool showed 73% of traders now anticipate the U.S. central bank will deliver a 25 basis point in its September meeting.
The European Central Bank is also poised to cut rates while the Bank of England is likely to hold this month.
Meanwhile, data showed British house prices rose last month at the fastest annual pace since late 2022, while a report showed the nation needs an additional one trillion pounds in investment in the next decade to grow the economy.
Asia & Overnight
Asian share markets slid on Monday after worries about a possible U.S. economic downturn slugged Wall Street, though U.S. stock futures did rally from an early dip and bond yields came off their lows.
Data on consumer prices (CPI) from China showed the Asian giant remained a driver of global disinflation, with producer prices falling an annual 1.8% in August when analysts had looked for a drop of 1.4%.
The CPI also missed forecasts at 0.6% for the year, with almost all the rise in food prices and goods prices up just 0.2%, pointing to subdued domestic demand.
Japan's Nikkei bore the brunt of the selling as tech stocks declined, losing another 2.4% on top of a near 6% slide last week.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 1.2%, after shedding 2.25% last week, while South Korea's market fell 1.3%
On a brighter note, S&P 500 futures and Nasdaq futures both edged up 0.2% following Friday's slide. EUROSTOXX 50 futures added 0.3% and FTSE futures firmed 0.5%.
Markets are also fully priced for a quarter-point cut from the European Central Bank on Thursday, but are less sure on whether it will ease in both October and December.
Oil prices found some support after suffering their biggest weekly fall in 11 months last week amid persistent concerns about global demand. Brent bounced $1.01 to reach $72.07 a barrel, while U.S. crude firmed $1.02 to $68.69 per barrel.
FTSE 100 technical analysis for today, 9th September 2024
Early signs infer a bullish Monday yet again after the ASX200 put in a decent bullish shift. That said the bulls need to break the daily 25ema which is now locked in as resistance at the 8268 level, with the 8320 area above that. They will be keen to test and ideally break 8300, having defended the 8160 level on Friday.
8120 remains lower support below that though and a level that should see a bounce if tested. That said, for today I am looking at the 8190 area to hold as support to start with if we get an opening drop, as we have the daily pivot and 30m coral here. Whilst the latter is still red following Fridays decline, it feels like it may well change to green this morning. The 2h chart is also on the cusp of going bullish and the Hull MA is at 8180, so could lend support here as well.
We dropped off the red 2h coral perfectly at 8260 on Friday and that has dropped to 8235 so the bulls will also need to contend with that price to start with, though with some momentum behind them I am thinking that 8255 is more likely to be first up.
If the bulls were to break above 8320 then the R3 level at 8340 is next up, though that could well be a big ask for today. It would also be a break out above the 10d Raff channel which is heading down currently, with the top of that at 8315.
If the bulls can defend any drop today then we may well be on for a Bull Monday and also some strength this week ahead of the likely rate cut by the ECB on Thursday.
Good luck today.
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