Bulls on the back foot again with 8222 8272 resistance | 8160 8118 support

Bulls on the back foot again with 8222 8272 resistance | 8160 8118 support

Technical analysis for FTSE 100 for 8th July 2024

Britain's domestic-focused stocks logged their best week in more than five months on Friday after a landslide election win by the Labour Party raised investors' hopes that the outcome will bring a boost for the UK economy.

The mid-cap FTSE 250 was up 0.9%, edging towards the key 21,000 mark. It hit more than a two-year high earlier in the session and had its best week since Jan 22.

British homebuilding companies were the top gainers on the FTSE 100 as investors welcomed Keir Starmer's plans for building 1.5 million new homes over the next five years. The blue-chip FTSE 100, however, fell 0.5%, after logging its strongest day in almost two months in the previous session as pound strengthened against the U.S. dollar.

With the election over, investors have priced in a 61% chance of the Bank of England commencing its rate trimming-cycle at its next meeting on August 1.

Across the Atlantic, U.S. data showed job growth slowed marginally in June and unemployment rate rose to more than a 2-1/2-year high of 4.1%, sending Nasdaq and S&P 500 to hit fresh intraday highs.

In France today, all the hand-wringing about a far-right victory looks to have been premature, with polls suggesting the leftist New Popular Front alliance gained the most seats, though well short of a majority. That outlook tempered the initial relief that the far right did not take power, and left the euro down around 0.1% at $1.0826 . French bond futures were also a fraction lower, with the market reaction limited so far.

Asia & Overnight
Asian stocks inched higher on Monday as investors grew more confident about a September U.S. rate cut, while the euro grappled with political uncertainty as French elections pointed to a hung parliament.

In France, a leftist alliance unexpectedly took top spot ahead of the far right, a major upset that was set to prevent Marine Le Pen's National Rally (RN) from running the government.

The loss of the far right was something of a relief for investors, though they also have concerns the left's plans could unwind many of President Emmanuel Macron's pro-market reforms.

Equities were supported by hopes a U.S. policy easing was getting closer. MSCI's broadest index of Asia-Pacific shares outside Japan were up 0.1%, after reaching a two-year top last week.

Japan's Nikkei firmed 0.2%, to near record highs. Chinese blue chips eased 0.4%, while bond yields rose as the central bank launched new money market operations.

S&P 500 futures and Nasdaq futures were both down 0.1%. Earnings season kicks off later this week when Citigroup, JP Morgan and Well Fargo  all report.

Investors took Friday's jobs report as adding to the case for a September rate cut from the Federal Reserve, with futures now implying a 77% chance of a move.

The main economic event will be the U.S. consumer price report on Thursday, where headline inflation is expected to slow to 3.1%, from 3.3%, with the core steady at 3.4%. German inflation data are out the same day, while China releases consumer prices and trade figures this week.

Oil prices slipped as the market waited to see what impact Hurricane Beryl might have on supplies from the Gulf of Mexico. Brent eased 14 cents to $86.40 a barrel, while U.S. crude fell 29 cents to $82.87 per barrel.

FTSE 100 technical analysis for today, 8th July 2024

Off we go for a new week with the new government hitting the ground running. The drop off 8280 could gather some steam to start with this week, and I am looking at initial support at the 8160 level as we have the key fib and S1 level here.

If we do hold that and bounce, then a climb towards the 8220 area would make sense, though this appears to be quite strong resistance for today so the bulls may well struggle to break above this. The daily pivot and red 30m coral are both here, while the 2hr chart is also bearish and has Hull MA resistance at 8227.

The ASX200 had a bearish session today as well, and with the political landscape continuing to be in a state of flux, with France being the latest, as well as earnings kicking in this week, we may well see some caution from the bulls. That said, the seasonality does have the bullish July....

Below 8160 then the bears will be looking to break below the 8100 level as we have the next daily support of note at the 8080 area though a slide of that magnitude today may be a bit much.... and we have S2 at 8118 in play as well, so could see that hold should we have a bearish session. Currently the daily chart is unwinding the election result gains, with a red candle for Friday and today currently. 8100 is also the pre election low, and now the bottom of the 20d Raff channel as well, so should we test that 8118 area we could see a bounce around here.

Resistance wise, above the 8220 level then 8263 R1 and 8272 key fib are the next ones of note and being clustered together would likely be fairly decent to short. It feels like the bulls may well have a bit of a job on their hands today though and a ranging day between 8160 and 8220 could be the order of the day.  Above 8272 then 8280 is the top of the 10d Raff channel, and 8326 is R2, along with the round number at 8300 - feels like a big ask to break 8272 though!

Keep an eye on those 8160 and 8220 levels for a break either way as well as if they don't get a reaction initially it would be worth hoping on the trend trades instead.

No major news today either which may well lend some weight to it being a ranging day. Good luck today.

Interested in how to start trading the FTSE 100? Frequently Asked Questions on Spread betting

Recommended Broker for FTSE 100 trading and how to start trading using support and resistance

Recommended broker IC Markets
IC Markets - offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!

Membership, Trading Tips, Support and Resistance Levels with Live Trading

If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.

What you get

  • Daily Analysis pre market open (sent around 7am each day) for FTSE 100, DAX40, Gold and S&P 500.
  • Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
  • Telegram live trading room and group membership for discussion and realtime trade updates

Keep up to date with new content, free sign up below with just your email address

Day trading for beginners - Join today and get:

  • Daily detailed analysis before the market opens
  • Detailed trade plans for the FTSE100, S&P500, Dax40 and Gold
  • Email updates during the day
  • Live trading room open all day
  • Telegram chat room groups
  • Help and support

Membership is £59.99 a month. My results spreadsheet in Excel can be viewed here

Latest technical analysis tips for trading and opinion