Technical analysis for FTSE 100 for 23rd April 2024
The FTSE 100 has closed at a record high after fears about an escalating conflict in the Middle East eased. London’s blue chip index rose 1.6pc on Monday to close at 8,023.87, surpassing the previous record of 8,014 set in February 2023. The index had climbed as high as 8,042.81 during the session, which was just short of its all-time trading high of 8,047.06.
Oil prices retreated after Iran on Friday downplayed Israel’s retaliatory drone strike and said it did not plan to respond. A barrel of Brent crude oil dropped 0.3pc to $87.02 on Monday.
The pound sunk to $1.23 against the dollar for the first time since November as investors ramped up bets that the US Federal Reserve will keep interest rates higher for longer than European counterparts.
Meanwhile, investor sentiment also got a boost as financial markets fully priced in a first quarter-point rate cut by the BoE for August and see at least two cuts before the end of the year, an earlier start to loosening than priced in last week.
By contrast, precious metal miners was the bottom performing index, slipping 2.2% as gold prices eased over 2% after Iran played down the risks of an escalation.
An industry survey showed that prices of homes being sold in Britain are close to their record highs after the biggest annual increase in a year.
Asia
Asian shares extended gains on Tuesday, taking cues from Wall Street as focus shifts to earnings results from U.S. tech giants in the week, while a still strong dollar pressured the Japanese yen to fresh 34-year lows.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, helped by a 1% jump in Taiwanese shares and a 0.8% advance in Hong Kong's Hang Seng index.
The Asian index rose 1% the day before on easing fears of a major escalation in the Middle East conflict, recovering some of the 3.7% losses last week. Japan's Nikkei edged up 0.1%.
Tech shares in the region cheered. Taiwan Semiconductor Manufacturing Co Ltd rallied 1.5% while MSCI Asia-Pacific ex-Japan IT index jumped 0.8%.
However, Chinese shares fell, with the blue chips losing 0.6%.
USA
Tech giants including Tesla, Meta Platforms, Alphabet and Microsoft announce their earnings results this week. UBS on Monday downgraded its rating on the mega-cap companies, warning that profit growth momentum of the so-called Big Six technology stocks could "collapse" over the next few quarters.
In addition to top corporate earnings, markets are also awaiting the release later this week of the U.S. gross domestic product figures and the March personal consumption expenditure data - the Fed's preferred inflation gauge - to further ascertain the trajectory of monetary policy.
Traders see the first Fed rate cut would most likely come in September, while the total easing expected this year would just be 40 basis points, a sea change from about 150 basis points of cuts priced in at the beginning of the year.
FTSE 100 technical analysis for today, 23rd April 2024
A decent bull Monday yesterday and we are within touching distance of a cluster of resistance at the 8090 area. As such we may well see some profit taking and bears appears here, for a drop down to test the 8020 support.
The 2h chart is bullish, with support lower down at the 7985 area from the Hull MA, and 7900 from the now green coral.
The bulls will be keen to build on the rises though as war tensions ease, and ahead of the plethora of earnings that are out this week. Tesla earnings today will be keenly watched and will have an effect on the Nasdaq later.
If the bulls can break above the 8100 level today then the next level of note is at the 8142 R2, though that would also be a break above both the Raff channels, currently sitting at the 8100 area as well. These lend some weight to a profit taking point here as well.
Initial support from the pivot as mentioned at 8020, but should the bears break below this then 8000 round number support and 7970 area below that also showing on the 30m chart with S1, key fib and the 200ema all here. As that ties in with the 2h Hull, then we should see a bounce here. And of course the bulls will be keen to keep the price above the 8000 level.
Some positive headlines now generated too with a new high on the FTSE100 being set yesterday which should attract some dumb retail money for a last little push higher.
Generally today we may see a slight bearish overtone (it is Tuesday after all!) after yesterdays exuberance. Tesla may well disappoint a bit later too...
Good luck today.
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Nice drop down to the 8020 support and now bouncing #ftse #ftse100 #trading