Technical analysis for FTSE 100 for 21st October 2024
The UK's FTSE 100 ended lower on Friday, weighed down by British American Tobacco following its settlement to end a tobacco lawsuit in Canada, but the blue-chip index logged weekly gains in anticipation of a UK rate cut next month.
The FTSE 100 was down 0.3% after closing at its strongest level since late May in the previous session, while the domestically focussed FTSE 250 index rose 0.2% to close at a two-week high.
Data showed British retail sales unexpectedly rose in September, contradicting signs that consumers were downbeat about possible tax rises ahead of the new government's first budget later this month. Gains last week in UK stock markets were mainly powered by Wednesday's data that showed British inflation fell to 1.7%, below the BoE's 2% target, bolstering bets for a rate cut by the Bank of England on Nov. 7.
Both the FTSE 100 and FTSE 250 snapped their two-week losing streak, with the FTSE 100 enjoying its best weekly performance in over two months.
Asia & Overnight
Asia shares dipped in and out of positive territory on Monday, under pressure from weakness in Chinese stocks, but bitcoin scaled a three-month peak as "Trump trades" continued to ramp up.
Gold hit another record high on conflict in the Middle East and an extremely close U.S. presidential election, with the yellow metal expected to stay in favour among much global uncertainty.
Optimism over Beijing's slew of stimulus measures first announced late in September has turned into caution in recent days as investors look to further details of more fiscal support from policymakers. Though China cut its benchmark lending rates on Monday, the move was anticipated.
Equities in Hong Kong were last down 0.6%, while China's blue-chip index swung between losses and gains. It last traded 0.4% higher, while the Shanghai Composite Index gained 0.36%.
That capped gains in MSCI's broadest index of Asia-Pacific shares outside Japan, which were last up a marginal 0.11%, a step back in sentiment after U.S. stocks posted a sixth straight week of gains on Friday. Japan's Nikkei rose 0.34%.
Oil prices ticked higher on Monday, nursing a steep fall from last week. Brent crude futures were last 0.4% higher at $73.36 a barrel, while U.S. crude ticked up 0.43% to $69.52 per barrel.
US Election
With just about two weeks to go before the Nov. 5. U.S. election, bets that a Donald Trump victory are on rise in some financial instruments. The Republican candidate's tariff, tax and immigration policies are seen as inflationary, and thus negative for bonds and positive for the dollar. He is also seen as taking a more favourable stance towards cryptocurrencies.
FTSE 100 technical analysis for today, 21st October 2024
A decent end to Friday with the climb off the 8320 level that the bulls will be looking to roll into a bull Monday today and a possible test of the 8395 resistance area. We have R1 here as well as it being the level that got a bearish reaction last Thursday. It's also worth noting that the 2h chart is bearish to start the week, following the bulls failure to break above the 8380 level on Friday. That also has 8380 as resistance so we could see a fake break above and then a drop back down today.
Above the 8396 level then the 8422 R2 level is next up, and that also aligns with the key fib level at 8415, and daily resistance at 8412. As such, if we see this area, and as it would be the first move above 8400 for a while, we could see the bears have a go here. Certainly worth a short!
Even higher, but not likely today I don't think, then the 8462 is R3, and then daily daily resistance at 8494....
Support wise, the first key one is the daily pivot at the 8355 level, with 8337 200ema on the 30m below that. As such, a long around this zone is worth taking this morning for some possible strength to start with. Should the bears break 8340 though and then Fridays support of 8320 is best up, but the bears would be looking to take it lower towards the 8299 key fib, and then 8248 ultimately which is the lower daily support.
The Raff channels have resumed their upwards trajectory though, and as such the bulls will want to keep the seasonality in play which is usually a decent bit of strength to end the month.
Not much on the news front today, but we do have BoE Bailey speaking at 14:25 - any clues on rate cuts will likely see the bulls pounce. Of course we are also heading towards the first Labour budget as well....
Good luck today and let's see if we get a bull Monday.
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