Technical analysis for FTSE 100 for 4th April 2024
The UK's blue-chip FTSE 100 index closed little changed on Wednesday, as a stronger pound overshadowed a boost from heavyweight mining, energy and bank stocks.
Precious metal miners firmed 2.1% as gold extended its recent record run, while energy stocks added 1% as oil prices continued to rise on supply risks.
The exporter-heavy FTSE 100 was flat on the day as the pound firmed 0.5% to $1.26, with losses in shares of big dollar earners Unilever, Diageo and AstraZeneca weighing the most.
The index had fallen by as much as 0.7% earlier in the session as the recent pull back in U.S. rate cut bets weighed on global investor sentiment.
Data on Wednesday showed a surprise fall in euro zone inflation last month, solidifying the case for the European Central Bank to start lowering borrowing costs. The more UK-centric FTSE 250 edged up 0.2% as industry data showed British supermarket total sales rose year-on-year in the four weeks to March 23 as slowing inflation encouraged shoppers to increase purchases.
Asia
Asian shares rallied on Thursday as U.S. rate cuts remained on the menu, even if their timing was unclear, while the yen slid against everything except the dollar and boosted Japanese stocks.
There was also action in commodities as gold reached another record, oil a five-month peak and copper a 13-month top, helping to lift shares in basic materials and energy companies.
Some of these gains were due to supply disruptions and geopolitical tensions, but they also reflect optimism about global growth given a recovery in recent factory surveys (PMI), particularly for China.
Overnight
EUROSTOXX 50 futures and FTSE futures both edged up 0.1%. S&P 500 futures rose 0.3% and Nasdaq futures 0.4%.
Sentiment was aided by a reaffirmation from Federal Reserve Chair Jerome Powell that U.S. rates were still on course to be cut this year, though the timing was data dependent.
The case for easing was underpinned by a survey of the U.S. services sector that showed its index of prices paid fell to the lowest since March 2020, offsetting a worrying rise in the survey of manufacturing released early this week.
That also outweighed a surprisingly strong ADP report, which showed private sector jobs rose 184,000.
While this series has a patchy correlation to the official payrolls report due on Friday, it was strong enough for Goldman Sachs to revise up its forecast for payrolls by 25,000 to a solid 240,000.
Such an outcome would top the median forecast of 200,000 and could lead markets to again pare the chance of a June rate cut.
FTSE 100 technical analysis for today, 4th April 2024
A bit of a fightback by the bulls yesterday as they defended the 7900 level, and they will be looking to do the same today and get a rise back towards the 8000 level.
Support today is at the 7916 level where we have the daily pivot and the 30m coral, so a bounce off this level would work well for a push up towards the 7965 2h coral (now red).
Below the 7915 level then yesterdays low at 7881 is next up, and that is also just below the S1 level at 7892. I think we may well see some optimism today though, especially if the S&P500 can continue to bounce. The 2h S&P500 chart is also bullish currently with decent support at the 5216 level.
Lower down support for the FTSE100 is at the 7857 level for S2, but then also the bottom of the 10d Raff at 7840. I don't expect it to get this low today though.
Resistance wise, above the 7965 key fib/2h coral (red) to start with then the bulls will be aiming for 8000, though we have R2 at 7976. This is the key level that they will need to break today and it may take a couple of attempts.
However, that said we have R3 at 8011 so the bulls may well need a concerted effort today if they are to try and get it through that 8000 level.
The Raff channels continue to head up maintaining the bullish bias, though with a bearish 2h chart the bulls need to take the initiative. They may well be helped by the fact that the 2h S&P500 chart is now bullish and will be keen to reverse the recent downside.
We have NFP Friday tomorrow so may well see a bit of a slower day today.
Coming up…
On Thursday, traders will get more insight on the job market with reports on US initial jobless claims and job cuts. A raft of Fed officials are due to speak: Loretta Mester, Alberto Musalem, Thomas Barkin, Patrick Harker and Austan Goolsbee. In Europe, the Eurozone S&P Global Services PMI and PPI will be published, as well as the European Central Bank’s account of the March rate decision.
Good luck!
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