Technical analysis for FTSE 100 for 23rd September 2024
The UK's benchmark FTSE 100 stock index slipped on Friday, registering weekly declines, after hotter-than-expected retail sales data from the economy, while a rise in the British pound pressured export-oriented companies.
The FTSE 100 fell 1.2%, while the more domestically-focussed midcap index lost 1.6%. Both indexes marked weekly losses and their biggest one-day fall in almost seven weeks.
British retail sales rose by a stronger-than-expected 1% in August, beating forecasts for a monthly rise of 0.4% and growth in July was revised up, data showed.
The data provided an extra boost to the pound's upbeat trend, which has risen to its highest level against the dollar since 2022 this week after the Federal Reserve cut rates by 50 basis points, while the Bank of England kept rates on hold at its meeting on Thursday.
UK stocks continue to lag both U.S. and euro zone equities this year, with both the Fed and European Central Bank expected to ease rates faster than the BoE.
Asia & Overnight
sian stocks firmed on Monday ahead of central bank meetings that are widely expected to deliver two more rate cuts and key U.S. inflation figures that should flash a green light for more easing there.
China's central bank surprised many by lowering its 14-day repo rate by 10 basis points, a couple of days after disappointing markets by not cutting longer-term rates. That helped nudge Chinese blue chips up 0.5%.
A holiday in Japan made for thin trading and MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2%, after bouncing 2.7% last week. Tokyo's Nikkei was shut but futures were trading at 38,530 compared to a cash close of 37,723. The index rallied 3.1% last week as the yen eased from its highs and the Bank of Japan (BOJ) signalled it was in no rush to tighten policy further.
EUROSTOXX 50 futures added 0.3% and FTSE futures 0.1%. S&P 500 futures firmed 0.3% and Nasdaq futures added 0.5%. The S&P is up 1% so far in September, historically the weakest month for stocks, and has gained 19% year-to-date to reach all-time highs.
Markets were still basking in the afterglow of the Federal Reserve's half-point rate cut, with futures implying a 50% probability it will deliver another outsized move in November.
Oil prices firmed further, having rallied around 4% last week on hopes lower borrowing costs would support global economic growth and demand. Brent added 40 cents to $74.89 a barrel, while U.S. crude rose 39 cents to $71.39 per barrel.
FTSE 100 technical analysis for today, 23rd September 2024
Yet another test of 8200 on Friday, but it held well and we have got a decent bounce overnight. That of course has left a bit of a gap down there, so if the bears break the daily pivot initial support at the 8240 level then a slide down to here could play out. That said, it is also starting the week just above the 30m coral so there is also a bit of support from that at 8230 to start with as well.
The 2h chart is now bearish once again and has Hull MA resistance at the 8280 area, along with a red 2h coral at 8305, so a rise to this area may well falter later. 8310 is also the key fib for today.
The 10d Raff channel is still heading up and the bottom of that channel is at 8185 - a break of the 8195 Friday low could then find support here.
As it's potentially a bull Monday I am thinking that we will get a rise and dip play out today though the bulls certainly have their work cut out. The US markets also left a few gaps behind from Friday so a dip down to close them before some more upside may well help a bull Monday later on.
The story last week was just missed orders so hopefully that doesn't continue into this week! The oil price has ticked up a little bit recently as Middle East tensions escalate, which will help BP and Shell and in turn the FTSE100.
If the bears break below the 8195 level of Friday's low, then the next key daily support is at 8130 so keep an eye for that - maybe tomorrow if we get a bear Tuesday play out.
On the flip side, above the 8310 level then 8340 remains as daily resistance - but I think that might be a big ask for today.
Good luck today and see you in the chat room!
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