FTSE 100 technical analysis for 8th August 2023
Will the FTSE 100 be bearish today?
The commodity-heavy FTSE 100 index ended lower, weighed down by a fall in mining shares amid concerns of weakened demand from China. The blue-chip index closed down 0.13pc at 7,554.49, while the FTSE 250 midcap index sank 0.39pc to 18,861.67.
Investors have sold off long-term Government bonds as uncertainty returns about the future of interest rates ahead of US inflation data this week.
Asian share markets were mostly weaker on Tuesday as investors digested weaker Chinese trade data ahead of key inflation readings from China and the United States to deliver an updated outlook on the health of the global economy.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.7% on Tuesday, after U.S. stocks ended the previous session with mild gains. The index is down 2.9% so far this month.
FTSE 100 technical analysis - Will the FTSE 100 be bearish today?
Great climb off the 7515 support yesterday right to the 7570 resistance level, but failing just short of the bigger resistance at 7580. That remains in play and should we see that today then a short here is still worth taking. After yesterdays bullish Monday then we may well get the bearish Tuesday today, and a drop down to the 7500 level, and possibly the 7480 this morning.
The S&P500 is just coming into 4500 support as I write this which may see a bounce towards the 4520 200ema line, and then some more downside. The bulls need to break above that 4520 level really to push much higher and then 4540 key fib would be the next level of note. Below 4500 then 4488 is the Hull MA and I would like to see that defended. A break of that would likely see 4450.
Back to the FTSE and above the 7580 level would likely manage to test the 7600 level. Above that ultimately I am still looking at the daily resistance at 7674, and the 20d Raff channels continue to head up on the daily chart.
7480 has now also got a green daily coral support following the rise yesterday so lends weight to this level.
Below 7480 and the bears will be aiming for 7435 though not sure it will drop that low today. Definitely keep an eye on the 7480 level for a decent reaction.
As it looks like we will see a bearish day, then shorting the rallies is the preferred play today and if anyone is still holding the 7565 short from yesterday then trail the stop on that.
Good luck today.
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