Technical analysis for FTSE 100 for 30th September 2024
British equities ended the week on a high note on signs U.S. inflation is continuing to ease, boosting the view that the Federal Reserve will continue its monetary loosening, while China's aggressive stimulus measures lifted mining and luxury stocks.
The bluechip FTSE 100 index was up 0.4%, while the domestically-focused FTSE 250 midcap index rose over 1%.
Both the indexes rose on a weekly basis, buoyed by hopes for a turnaround in the Chinese economy after policymakers this week announced numerous aggressive stimulus measures. Still, the FTSE 100 has lagged the European benchmark STOXX 600, which gained more than 2% for the week.
In the latest move, China's central bank on Friday lowered interest rates and injected liquidity into the banking system, with more fiscal measures expected to be announced before China's week-long holidays starting on Oct. 1.
Lifting sentiment, the U.S. personal consumption expenditures (PCE) price index stood at 0.1% in August as expected, easing from an unrevised 0.2% gain in July. In the 12 months through August, the PCE price index stood at 2.2%, easing from 2.5% in July.
Odds that the Fed will cut rates by 50 basis points at its November meeting stood at about 52.1%, compared with 50% seen before the data, as per the CME Group's FedWatch Tool.
Asia & overnight
Chinese stocks extended a blistering rally on Monday with those in the mainland headed for their best month in almost a decade, as Beijing rolled out further stimulus measures to arrest a slowdown in the broad economy.
Benchmark indexes in mainland China began the week on a solid footing after clocking their best weekly performance in nearly 16 years on Friday, with the CSI300 blue-chip index last up more than 6.22%.
The Shanghai Composite Index jumped 5.7%, while Hong Kong's Hang Seng Index rose 3.34%.
Shares of property companies rose sharply in response to China's central bank late on Sunday saying that it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country's beleaguered property market.
Adding to efforts to reverse the property downturn, Guangzhou city announced the same day the lifting of all restrictions on home purchases, while Shanghai and Shenzhen eased curbs on buying.
Key developments that could influence markets on Monday:
- German CPI and retail sales, French CPI. EU consumer and business sentiment
- Introductory statement by ECB President Christine Lagarde at ECON Hearing. Bank of England policymaker Megan Greene takes part in a panel discussion
- Federal Reserve Chair Jerome Powell speaks on the economic outlook. Fed Board Governor Michelle Bowman speaks
- US Chicago PMI, Dallas Fed activity index
FTSE 100 technical analysis for today, 30th September 2024
A decent rise and dip played out on the ASX200 Monday and we may well see similar for a bull Monday, at least to start with. We are just looking to open on the daily pivot support at the 8301 level and as it's also the round number we may see the bulls quick out the blocks to defend this. 8290 is also the 200ema so helping the support in this area. They will certainly need to be quick out the blocks as a break of 8290 will see a test of the 8250 level, where we have the daily support and key fib.
If this gets defended then a rise back to the 8300 level looks likely.
Resistance wise, the 8345 area is fairly key still, having almost got tested to the point on Friday. 8358 is the key fib above that as well, so should we see a bull Monday kick in and a rise towards this area its worth shorting. That 8350 is also the top of the now declining 10d Raff channel.
For the bulls at least, the 2h chart remains bullish with the green coral at the 8282 level. However, the S&P500 isn't quite so rosy and should we see that start to drop off it will likely carry the FTSE100 down with it. The past few daily candles on the FTSE100 have all got long wicks which suggests that rises are being sold. We are also at the end of the month and quarter - so booking profits to help the stats for year end bonuses is also quite likely.
That will also lend weight to any rallies being sold today helping that rise and dip play out. UK GDP has also just been released and missed estimates as the economy has slowed more than expected.
Britain’s economy grew less than expected in the second quarter of the year as Rachel Reeves prepares to deliver her first Budget. The UK’s gross domestic product (GDP) expanded by 0.5pc in the three months to June, according to the Office for National Statistics (ONS). Growth was revised down from previous estimates of 0.6pc growth.
Below 8250 and the bears will be likely to target the daily support at 8218 and then S3 at 8198.
On the flip side, if the bulls can break 8350 then 8267 R2 and 8398 R3, with the latter also coinciding with the round number likely to see a decent reaction.
If it were to test that 8400 area then a short here is also worth a go.
Good luck today.
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