Technical analysis for FTSE 100 for 6th November 2023
Asian shares rallied for a fourth straight session on Monday after markets priced in earlier rate cuts in the United States and Europe, bullish wagers that will be tested by a swarm of central bank speakers this week.
Shares in Asia advanced following Friday’s rally in US stocks and bonds as investors gave further credence to the idea interest rates are near their peak. A region-wide equity gauge extended its winning streak to a fourth day, and is heading for its highest close since September. South Korean shares lead the rally, with the Kospi jumping as much as 4.4%, following Sunday’s news the country would ban short selling until the end of June.
Battered bond markets also enjoyed a welcome recovery as a benign U.S. payrolls report and upbeat productivity numbers suggested the labour market was cooling enough to obviate the need for further rate increases from the Federal Reserve.
Futures markets swung to imply a 90% chance the Fed was done raising rates, and an 86% chance the first policy easing would come as soon as June.
Markets also imply about an 80% probability the European Central Bank will cut rates by April, while the Bank of England is seen easing in August.
FTSE 100 technical analysis for today, 6th November 2023
The bears brought it down from the 7480 area on Friday and that remains the resistance zone to watch at the moment. A break of that will likely lead towards the 7515 area, however it looks like we will get a bit more downside this morning and possibly a bounce later on.
The daily pivot and red 30m coral are both at the 7430 level and I am thinking that we may see an initial rise to this level before a drop back down.
Above 7430 then I can see the bulls pushing on, with 7465 then the 7480 levels to watch for. The former is R1 and the key fib so could well cap any rises if the bears are feeling like capitalising on Friday's drop.
Initial support is at the 7402 level where we have the 2h coral and the 200ema 30m, but a break of this will likely test that 7380 daily support. I would like to see this hold really, and a possible overshoot may well play out, as we have the next support fairly close at 7369 with the key fib here. 7360 is also the next daily support level of note, so I think a long around this area today would make sense.
We may well need the USA to play ball to get a bull Monday today, but the slight spanner in the works is that the S&P500 is just testing the top of the 20d Raff channel, as is the Nasdaq. Lends weight to a dip and rise day though!
Looking ahead to the news today, highlights include German Industrial Orders, EZ & UK Final Services and Composite PMIs, EZ Sentix Index, Canadian PMI, FOMC Senior Loan Officer Opinion Survey & BoC Market Participants Survey, Speech from BoE's Pill.
US clocks moved back an hour on Sunday to EST, as such the London-New York time gap is back to five hours.
Looking at the FTSE100 2h chart we have a fairly tight range with support from the coral at 7400 and resistance from the Hull MA at 7440 so we will get a break of one or the other soon. The first 10 days or so of November usually has a bullish bias looking at the seasonality chart so we may well see a bit more upside yet this month.
Good luck today.
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