Technical analysis for FTSE 100 for 25th January 2024
British equities touched a one-week high on Wednesday, bolstered by China-exposed stocks following measures taken by the Chinese central bank to support the economy, while sterling rallied after a survey hinted at high-for-longer interest rates.
The exporter-heavy FTSE 100 ended 0.6% higher, while the domestically oriented FTSE 250 index added 0.9%.
Meanwhile, the pound rose after a survey showed Britain's economy started 2024 on a stronger footing, prompting investors to reduce their bets on the Bank of England moving quickly to cut interest rates.
Industrial metal miners rose 2.6% after China's central bank announced a 50 basis points cut in the amount of cash that banks must hold as reserves from Feb. 5, in an attempt to shore up a fragile economic recovery.
Most Asian equities rose on Thursday as a rally in Chinese stocks accelerated on bets that the latest stimulus measures from Beijing may provide a floor for the country’s cratering stock market.
Hong Kong and mainland China shares extended Wednesday’s late jump after the People’s Bank of China surprised investors with a plan to cut banks’ reserve requirement ratio next month. The regulators followed PBOC action by adding more measures to bolster the slumping property and stocks
FTSE 100 technical analysis for today, 25th January 2024
Another day and another record for the S&P500.... along with Microsoft passing the $3tn valuation. All good till it isn't.... is it a bubble....?! Anyway, the FTSE100 continues to hover around the 7500 level and we managed to test the 7540 level yesterday with the potential for another test, and a break higher today.
7540 is R1 to start with, and we may well see any early drop down to the support levels hold for a push up. If they manage to break the 7540 then I am looking for a test of the 7570 area where we have the key fib, but also it would be the first test of the daily 25ema at 7575 and should in theory get a reaction. Just above this we also have the R3 and top of the both the Raff channels at 7585 so a few decent resistance levels in play here.
The 2h chart remains bullish after yesterday and we tested the Hull MA again and saw it hold overnight at the 7509 level. Any drop down to test that again should also see a bounce. Lower down we have the green 2h coral at 7485.
Today's big events news wise will be the ECB rate decision, expected to remain the same at 4.5%, at 13:15 and then the US data at 13:30 for GDP Growth rate and Durable Goods orders, both forecasted to have declined.
If the bears were to break below the 7485 level then a slide down to 7470 and then 7450 would probably play out, though the bulls will be keen to defend the 7500 area today I feel.
That said, the daily chart still looks more pessimistic/bearish, with the Raffs heading down and the 25ema resistance at the 7575 level.
Should the bears really go for it and break above that though then we still have the 7613 level in play to be tested.
Generally for today I am thinking that we get a bit more of a rise as the US climbs a bit more, but am mindful that the US market have also come a bit far too fast, so a cooling drop back is likely soon.
Good luck today.
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