Technical analysis for FTSE 100 for 13th December 2023
The FTSE 100 closed flat on Tuesday as gains in aerospace and defence stocks were offset by losses in construction and materials, while soft domestic wages data fuelled optimism that Bank of England would keep interest rates unchanged this week. The blue-chip FTSE 100 hit a eight-week high during the session but closed flat for the day, while the domestically-focussed FTSE 250 index fell 0.5%.
Meanwhile, official data showed British wage growth slowed more than expected in the three months to the end of October, but pay is probably still increasing too quickly to persuade the Bank of England to cut interest rates any time soon.
Across the Atlantic, U.S. consumer prices unexpectedly rose in November while underlying inflation pushed higher, offering more evidence that the U.S. central bank was unlikely to pivot to interest rate cuts early next year.
The Federal Reserve, Bank of England and the European Central Bank will announce their respective decisions during the week, with all three expected to hold rates steady.
Asian shares were mixed on Wednesday, while oil prices slid to six-month lows as traders waited for the year's final policy decision from the Federal Reserve and clues on whether the central bank will cut rates next year. Brent bottomed at $72.75 a barrel, its lowest level since late June, while U.S. crude slid to $68.14 a barrel on concerns of softening demand and oversupply.
The Fed takes centre stage on Wednesday, where it is due to announce its rate decision at the conclusion of its two-day policy meeting.
FTSE 100 technical analysis for today, 13th December 2023
Slight overshoot of the 4615 support level on the S&P500 yesterday, but apart from that it was bullish for the session, and has pushed up to the 4650 level. That bodes well for some more upside on the FTSE 100 today, having topped out at 7610 yesterday. The bulls will be cheered by the move above 7600, but frustrating that they failed to test the 7625 resistance that still remains in play.
We have the key fib there to start with so an early rise looks possible, as long as the 7540 200ema (30min) holds as support to start with. Still running the 7552 long from yesterday as well, so despite the miss on the GDP news this morning, I am going to hold that a bit longer and hopefully we break above the 7565 resistance level. That is the Hull MA line there and has capped the overnight movements so looks key to start with.
Above that R1 is at 7599 and then a potential double top with the 7610 from yesterday. Though a test of that 7625 would still fit the charts well. If the bulls were above to break above that today then 7640 R2 would be the next level of note.
Support wise, the 200ema at 7540 as mentioned and if the bears were to break below this then 7523 is the key fib, and then the bottom of the 10d Raff channel at 7495 and a double bottom with the recent low.
It feels like we may well get a rise and dip today though. We have the Fed at 7pm with rates expected to stay at 5.5% - buy the rumour, sell the news possibly today. Prior to that we also have the PPI figure at 1330 in the US - again to give it some volatility later.
Good luck today.
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