Technical analysis for FTSE 100 for 26th September 2024
The UK's main stock indexes ended Wednesday on a downbeat note, hurt by energy shares tracking lower oil prices, while miners kept the losses in check as gold soared to a record high on expectations of another big rate cut by the U.S. central bank.
The blue-chip FTSE 100 was down 0.2%, while the midcap FTSE 250 edged 0.1% lower. The benchmark index got it biggest boost on Tuesday after China released a raft of stimulus measures.
However, the optimism faded as market watchers questioned whether the scope of proposed measures was sufficient to fix deep-rooted issues in China and spark a sustained resurgence in consumer and industrial demand. Even China's central bank reducing its medium-term loan rate on Wednesday did little to lift sentiment again.
Asia & Overnight
Asian stocks bucked the global trend to extend a rally on Thursday, fuelled by persistent optimism over China's aggressive stimulus package, although there were signs some of that enthusiasm was starting to ebb.
The sea of green across equities in Asia came even as Wall Street closed lower overnight with global stock indexes giving up their gains from earlier in the week.
Still, MSCI's broadest index of Asia-Pacific shares outside Japan rose more than 1% to an over two-year high on Thursday. Japan's Nikkei surged 2.4%.
In the broader market, investors turned their attention to a raft of speeches from Federal Reserve policymakers later in the day, including remarks from Chair Jerome Powell, which could provide further clues on the U.S. rate outlook.
The release of the core personal consumption expenditures (PCE) price index - the Fed's preferred measure of inflation - is also due on Friday.
Markets are now pricing in a roughly 62% chance of a 50bp cut at the Fed's November policy meeting and see a total of 77bps worth of cuts by the year end. Shifting expectations of how aggressive the Fed would ease rates this year and next have in turn kept the dollar largely rangebound over the past month.
In commodities, oil prices edged up with Brent crude futures last 0.27% higher at $73.66 a barrel. U.S. crude rose 0.2% to $69.82 per barrel.
FTSE 100 technical analysis for today, 26th September 2024
The bulls are back on the front foot this week and we are looking at opening above 8300 again - as such it feels like a buy the dip day today, ahead of the PMI data out of the USA tomorrow. The bulls will be aiming for that 8400 resistance area still, and we have R3 at 8407 for today as well. The S&P500 and Dax40 futures are already strong, testing R2 levels before they even open. China has unveiled more stimulus measures which is helping the bulls.
Initial resistance for the FTSE100 is at the 8316 R1 level, and that also lines up with yesterdays level that we dropped off from, so any drop off from here down to the daily pivot area at the 8272 may well then find support. The Raff channels are still heading down though so the bulls do have to make a bit of effort if we are to see that 8400 level today or tomorrow.
Above the 8316 then the key fib is 8336, and then 8363 for R2. The former may well get broken easily, while R2 is likely to generate a bit of a stutter. 8355 is also the top of the 10d Raff channel, with 8380 is the top of the 20d Raff. So there are a few significant hurdles for the FTSE100 to jump on route to 8400. Feels like we may well see a bullish October though! Q4 2024 is certainly going to be an interesting one....
Support wise for today, if the daily pivot breaks, 8220 is the key fib and also just below S1 at 8225. With the green 2h coral at 8263 though and aligning with the daily pivot area. I am not sure that the bears will have much of a say today. Lower down, though unlikely, we have 8181 S2, and the recent 8195 level that we bounced off. Don't expect either of them today though!
US Q2 GDP news at 1330 is forecasted to have increased to 3% from 1.4% previously; we also have initial jobless claims at that time with 224k forecasted.
So, looking like a dip and rise day, with the Dax40 also looking like an initial drop off the 19090 R2 level. They will be looking to defend the 19000 round number on that today, and worth noting 18950 is the Hull MA 2h support below that as well - keep an eye on both those supports.
Good luck today.
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