FTSE 100 technical analysis for 24th August 2023
Asian shares rallied on Thursday after blockbuster results from tech darling Nvidia boosted Wall Street and a retreat in U.S. bond yields eased pressure on borrowing costs globally.
A round of soft surveys on manufacturing had also revived hopes central banks were done tightening, though that might change depending on what clues about interest rates Federal Reserve Chairman Jerome Powell gives at an annual central bank summit in Jackson Hole, Wyoming, on Friday.
On Wall Street Wednesday, the Dow Jones Industrial Average rose 0.54%, the S&P 500 gained 1.10% and the Nasdaq Composite added 1.59%.
FTSE 100 technical analysis for today
The bulls are finding their strength again, but for how long? Having broken the 7300 level once again the next daily resistance level at 7355 is in play to start with today, with possibly a test of the 7400 level later. With daily resistance here, along with R2 I expect a stutter here (or probably the usual overshoot then drop back!)
The daily 25ema remains in play as higher resistance at 7441 now, so keep an eye out for a test of this either today or tomorrow.
If we do get an initial drop off the 7355 level I would like to see that get as far down as the daily pivot at 7310 and we also have the 30m 200ema here, so should in theory be a decent level for a bounce.
If the bears were to break below the 7310 level then 7268 is the key fib support to keep an eye out for.
The bulls have made good in-roads this week, despite the fairly negative news flow and talk of recessions, slow downs and more rate rises. That may well continue to be the case for the moment, and certainly till we rise to test the 25ema at 7440.
The S&P500 is just breaking above the Raff channels as I write this (and in fact the FTSE100 has broken above its 10d Raff channel top as well) which is a good sign for some further strength, with the "buy the dip" still the play this week. Usual August choppiness is also in play though, hence the overshoots for the key levels. The S&P500 may well get a rise towards the 4500 level, and possibly 4513 R2 today. It will be dependant on defending any drop down to the pivot at 4438 though.
Likewise with the Dax40 - a defence of any drop to 15756 where we have the daily pivot and the green 30m coral. Initial resistance is at the 15871 key fib level. It's also just testing the top of both the Raff channels to start with at 15820.
Good luck today.
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