Technical analysis for FTSE 100 for 5th September 2023
The FTSE 100 closed in the red as the boost from China’s stimulus wears off. The blue-chip index was lifted by mining stocks during early training after China rolled out new measures on Friday to prop up its stalling economy. However, the FTSE 100 ultimately closed down 0.16pc at 7,452.76. The FTSE 250 midcap index dipped by 0.07pc to 18,524.14.
Asian equities fell on Tuesday as the spotlight remained on China and its efforts to stabilise its stuttering post-pandemic economy, while traders awaited the outcome of a policy meeting of the Reserve Bank of Australia.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.75% lower at 511.14, moving away from 515.37, the highest level since Aug. 11 it touched on Monday.
China shares clocked their best day in over a month on Monday on the back of fresh measures to help boost the faltering economy. On Tuesday, China’s blue-chip CSI 300 Index fell 0.40%, while Hong Kong’s Hang Seng Index slipped 0.88%, giving back some of the gains.
FTSE 100 technical analysis for today, 5th September 2023
Ended up quite bearish yesterday with the US closed and the FTSE 100 bulls failing to hang onto the 7490 support level. That has seen a further decline and we are now nearly at the 7420 daily support level. Initially today we may well see a test of this, and possibly a bit lower as we have S2 at 7398 if we break below the S1 level at 7425 first thing.
A rise and dip would actually fit the chart pretty well today though so if that support holds then a rise to test the resistance at the 7475-7495 area to then set up another leg down from there could well play out. That higher resistance level is now locked in on the 2hr chart with the Hull MA at the 7485 and then coral at 7492.
We are also just breaking down below the 10d Raff channel at I write this, so the bulls will need to be quick out the blocks really if they are going to defend the 7400 level.
A break of 7400 and then the S3 level at 7348, with the daily support 10 points below that at 7338 are next up, and the bears would continue to hold all the cards. The Chinese stimulus measures that were announced have failed to keep the rally going for the moment, though a pause in rate rises may well see the bulls appetite reappear.
September is usually bullish till mid-month and then drops off so there is still time for that to play out.
Resistance wise, then the 7485ish area is the main one as mentioned and I would like to see a rise to test this today, but above that then 7502 for R1, 7521 for the key fib and then as high at 7551 for R2. I am not expecting us to get that high today, but with the US back from their holiday yesterday we may well see some buying appetite to start with.
So, it is up to the bulls really today, and I am thinking that we will get a rise and dip play out. Watching 7460 and 7490 as the resistance levels, 7400 and 7350 as support.
Good luck today.
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