Technical analysis for FTSE 100 for 30th January 2024
The UK's blue-chip index ended little changed on Monday as gains in precious metal miners were offset by losses in life insurers and investors turned cautious ahead of major central bank decisions and earnings later this week.
The FTSE 100 ended flat but touched its highest level since Jan. 11 earlier in the session, as shares of oil majors BP and Shell rose nearly 1.0%.
Precious metal miners topped the sectoral chart, rising 2.0%, and hovered around their two-week highs after gold prices firmed as rising tensions in the Middle East lifted demand for the safe-haven asset.
The UK's midcap FTSE 250 dipped 0.1%.
Investors are awaiting rate decisions from the U.S. Federal Reserve and the Bank of England (BoE) later this week. While policymakers are widely expected to hold interest rates, traders will closely watch for any commentary on the potential for rate cuts. The British public's expectations of a drop in inflation for the 12 months ahead fell to 3.9% in November and 3.5% in December from 4.2% in October, as per a survey that will help the BoE decide whether to signal a move towards rate cuts.
Asia stocks slipped Tuesday, led by a selloff in Hong Kong equities as the liquidation of a large Chinese developer intensified concerns over the nation’s embattled real estate sector. Stocks in Hong Kong fell around 2%, while those on the mainland were poised to decline for a third day. The impact of China Evergrande Group’s liquidation order pushed a Bloomberg index of Chinese developers down almost 4%.
Asian shares fell on Tuesday, hurt by the court-ordered liquidation of property giant China Evergrande while rising geopolitical tensions propped up oil prices and kept a lid on risk appetite ahead of the Federal Reserve's meeting. U.S. Treasury yields remained under pressure in Asian hours, keeping a lid on dollar movement, after the Treasury Department said it would need to borrow less than its previous estimates.
Overnight, Wall Street gained, with the S&P 500 notching yet another record high close, as market participants looked ahead to this week's slew of megacap earnings, including results from Microsoft and Alphabet later on Tuesday.
FTSE 100 technical analysis for today, 30th January 2024
Well the US bulls continued apace yesterday with the S&P500 busting through the 4901 previous high with ease. However there is a whiff of bear Tuesday about today so shorting the rallies could be a good move today as well. The FTSE100 has initial support at the 7650 level with the daily pivot here, and also just below the now green 30m coral line.
As such we may well get an early bounce from here to test the 7685 resistance level before a more sustained drop over the course of the session.
Below 7650 then the 7600 is the 2h coral line and also S3 so would possibly be the lowest we see today, unless the war rhetoric continues to ramp up and triggers the bulls into a mass of profit taking. We do have s1 at 7636 and S2 at 7615 in play as well - a little bit of bunching given yesterday's fairly sedate day on the FTSE100.
We are just sat on the 7680 20d Raff channel top to start with as well, which will likely act as initial resistance and has capped the bullish algos overnight. Above that then R2 at 7686 is in play, though ultimately we could still be on track for the test of the daily resistance level which is now at 7740.
The ASX200 was bearish today which may well be leading the way for a bear Tuesday and we follow suit. We also of course have the US interest rate tomorrow so there could still be a bit of caution above that though based on yesterday the US markets seem to be pricing in a cut already! Probably remain at 5.5% though I expect.
If the bears were to break below the 7600 level then the sentiment will probably change quite quickly though the daily chart is now looking a bit more optimistic following the bounce from 7400. The moving averages are not far off crossing back to bullish mode as well and have support at the 7595 level, again lending weight to this 7600 area.
Good luck today.
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