Technical analysis for FTSE 100 for 9th February 2024
Early gains in the UK's blue-chip stock index fizzled out on Thursday after drugmaker AstraZeneca fell more than 6% after disappointing earnings and outweighed a jump in the shares of British American Tobacco and Unilever
The blue-chip FTSE 100 slipped 0.4%, reversing early gains of as much as 0.3%.
On the macro front, Bank of England (BoE) rate-setter Catherine Mann said supply chain disruption from hostilities in the Red Sea could quickly feed into companies' pricing decisions, exacerbating Britain's inflation problem.
Markets have revised expectations for the first UK interest rate cuts, with the first reduction not fully priced until August.
Chinese equities in Hong Kong slumped for a third straight day amid public holidays in many markets in the region, including the mainland. Japanese stocks edged higher. Japan’s Nikkei 225 index rose 0.3%, paring earlier gains of as much as 1.2%, while the Hang Seng China Enterprises Index dropped 1%. The MSCI Asia Pacific Index is on track for its third straight weekly gain amid a flurry of stimulus announcements from China as it attempted to stem an equity market slump. Both gauges are higher for the week thanks to a big gain on Tuesday amid optimism around state support.
Japanese shares hit 34-year highs on Friday as world stocks eyed a third week of gains, while adjustments to interest rate expectations sent the yen to a two-month low and the Australian and New Zealand dollars in opposite directions. In China, mainland markets were closed and Hong Kong traded thinly and shut early, with the Hang Seng down 0.8% amid nerves authorities may not deliver on promises for support.
FTSE 100 technical analysis for today, 9th February 2024
Wasn't much of a bounce in the end yesterday off the 7600 support, probably as it hit so late in the day. That 7593 level is still showing as support though so we may well see a better defence of that again today as once again the bulls will be keen to pull away from 7600. We are also opening in this support area too.
Below the 7590 level then I think we will probably see a slide down to the 7565 area where we have daily support and the key fib. Should it get this low then I would like to see a bounce here, as it would also be a test of the daily 200ema. 7556 is also S2.
It feels like the FTSE100 has been treading water a bit recently and is lacking some clear direction. It's not really been in step with the bullishness on the US markets, but neither has it been particularly bearish, despite the drop off 7700. That is reflected in the fairly level 10d Raff channel that we currently have on the daily chart.
If the bulls do pull their finger out today then initially we have 7636 as resistance with the 30m 200ema here, and also the 2h Hull MA. The 2h chart is currently bearish after the lacklustre day yesterday and we also have the red coral at 7650. As such the bulls will need to break above this though might only get as far as the next key level at 7665!
With the daily resistance here, along with the key fib, it's an area that is ripe for a stutter so keep an eye on this. Above 7665 though and 7690 is next up. We may well see some profit taking later on today as well, ahead of the weekend.
Usual Friday warning to expect a bit of choppiness so keep your guard up today - for new members Friday is a good day to be a bit more risk off.
Good luck today and have a great weekend.
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