Technical analysis for FTSE 100 for 12th December 2023
The FTSE 100 closed lower on Monday, with lower metal prices dragging down miners as investors await a slew of central bank meetings and economic data this week for clues on the path of monetary policy. The blue-chip FTSE 100 slipped 0.1%, while the domestically focussed FTSE 250mid-cap index added 0.3%.
Precious and industrial metal miners each fell more than 2% as gold prices eased on the back of a firmer dollar, while iron ore prices lost ground on disappointing China consumer price data.
All eyes are now on major central banks, with the Bank of England (BoE), Federal Reserve and European Central Bank (ECB) scheduled to announce their monetary policy decisions during the week.
The three major central banks are seen keeping rates unchanged at their respective meetings this week. Traders expect the BoE to cut rates at a slower pace next year than the Fed and ECB. Among economic data, UK employment, inflation prints across the euro zone, and November U.S. consumer prices will be on investors' radar. The FTSE 100 has underperformed its global peers so far this year, with the index only up around 1% compared to a nearly 20% jump in the S&P 500 and a more than 10% rise in the pan-European STOXX 600.
Shares in Asia rose ahead of US economic data and meetings from major central banks that will give fresh clues about the likelihood of interest-rate cuts next year. Hong Kong equity gauges rose, while stocks steadied in mainland China, as traders await decisions from a meeting of Chinese economic policymakers that may indicate how much stimulus to expect next year.
Asian shares crept higher on Tuesday while the dollar eased as investors stayed cautious ahead of a crucial U.S. inflation report later in the day that will set the tone for the week filled with central bank meetings.
The U.S. Federal Reserve is widely expected to hold rates on Wednesday, with the spotlight squarely on comments from Chair Jerome Powell during his press conference as well as the central bank's dot plot and summary economic projections. Before that, the U.S. Labor Department's Consumer Price Index (CPI) report later on Tuesday is expected to show inflation still cooling but staying well above the Fed's 2% annual target, with core CPI expected to come in at 4%.
FTSE 100 technical analysis for today, 12th December 2023
That drop down to test the 7500 had the look of a bit of a stop hunt but the bulls managed to defend it anyway, to get a bit of a bull Monday in the end. Things still look positive on the charts ahead of the various bits of data out this week. We kick off today with employment data at 7am, coming in largely as expected, then the more closely watched US inflation data later at 1500.
The three major central banks are seen keeping rates unchanged at their respective meetings this week. Traders expect the BoE to cut rates at a slower pace next year than the Fed and ECB.
Initially we have resistance at the 7586 level with the key fib and R1 here, and that is also aligning with the recent high on Friday, that we saw the drop off from. As such, a bit of a double top reaction here this morning would make sense with the bears attempting bear Tuesday. The ASX200 was pretty bullish today though so we may well see the bulls try and keep the momentum going and a push towards the 7625 resistance level mentioned a few times in the emails.
Above 7625 then the top of the Raff channels come into play with the 20d first up at the 7640 area, then the 10 day at 7655.
Support wise, the 7550 area looks decent with the 30 green coral here, and just above the daily pivot at 7539. We also have the 30m 200ema at the 7531 level, and the 2h Hull MA at 7550. So a few key things here.
Obviously a break of that would then see a slide down to S1 at 7504, and then a potential double bottom with yesterday but given the way it snapped back yesterday I think we will be seeing a bit more positivity over the next few session. Famous last words!
Generally today it looks like a buy the dip session again, and a hold of that 7550 bodes well for a test of the 7625 area.
Good luck today.
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