Technical analysis for FTSE 100 for 11th September 2024
London's FTSE 100 ended lower on Tuesday, led by a sell-off in healthcare and energy shares, while cooling wage growth in the UK cemented bets for further interest rate cuts by the Bank of England.
The blue-chip FTSE 100 fell 0.8%, after logging its best day in over a month on Monday. The mid-cap FTSE 250 ended the session flat.
Rate-sensitive real estate and homebuilder indexes were also among the top gainers after data showed British pay growth cooled in the three months to July to a more than two-year low and employment shot higher. Economists suggest the data keeps the BoE on track for a November rate cut.
Investors broadly took the U.S. presidential debate between Donald Trump and Kamala Harris in stride where details were scarce but jabs aplenty. The spotlight though belonged to Taylor Swift, who right after the debate endorsed Harris.
Asian markets were broadly lower and U.S. stock futures slipped, with the dollar on the back foot as both candidates clashed over issues such as immigration, foreign policy and healthcare, but the debate was light on specific policy details.
The focus for markets now shifts to the U.S. inflation reading later in the day, although the U.S. central bank has made it clear employment has taken on a greater focus than inflation.
While the Federal Reserve is likely to cut rates next week, there is fair amount of uncertainty around the size of the cut. Markets are pricing in one out of three chances of a 50 basis point cut and anticipate 114 bps of easing this year.
Futures indicate European bourses are due for a lower open as traders, with not a lot of economic data in the day, will likely focus on Fed moves ahead of the European Central Bank meeting on Thursday where it is expected to cut rates.
FTSE 100 technical analysis for today, 11th September 2024
A decent drop in the end yesterday as the bears attempted to break the 8200 level again. It's just about held overnight having bounced off the 8170 area, and we may well see the bulls try to push it up today. Initial resistance is at the 8220 daily pivot level, with 8270 above that, with the key fib and R1 both here.
Following the drop yesterday the 2h chart is tenchnically bearish but the price is currently above the Hull MA, so a bit indecisive to start with today. We are seeing the bulls fighting back. The daily chart also remains bearish, with the 25ema, R1 and top of the 10d Raff channel all at 8270 - should we get this high then a short where is worth a go.
Support wise, the 8160 area still looks viable, with the key fib here and also the recent low, along with 8170 for S1. Should the bears break this though then the 8120 level remains in play, and in fact lines up with S2 today.
Generally I am thinking that it might well be a bit more bullish today and we may well see sentiment change to "buy the dip". We have the ECB rate cut likely tomorrow so that will help, and the bulls will be keen to pull away from the 8200 level.
GDP has just come in at 0% this morning which may well encourage another rate cut next month... or possibly November from the BoE. We also have some CPI news out at 1330 in the USA so we may well see a bit of volatility then.
So watching the 8220 level closely to start with and see if we get an opening dip off that, and then the 8270 level above.
8160 and 8123 for support.
Good luck today.
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