Technical analysis for FTSE 100 for 13th September 2024
The FTSE 100 hit its highest level in over a week on Thursday, amid broader gains after some clarity around the U.S. Federal Reserve's expected interest rate cut improved risk appetite.
The blue-chip FTSE 100 ended 0.6% higher, while the mid-cap FTSE 250 was up 0.8%, also registering a one-week high.
U.S. producer prices rose slightly more than expected in August. Markets are currently pricing in an 85% chance of a 25-basis-point U.S. rate cut next week, according to the CME FedWatch tool.
Meanwhile, the European Central Bank lowered its deposit rate by 25 basis points to 3.50% in a widely telegraphed move, following up on a similar cut in June as inflation and economic growth slowed. The Bank of England is widely expected to hold rates at its meeting later this month.
Optimism
A rally that’s already added over $1.3 trillion to the S&P 500 this week powered ahead as the latest economic data did little to alter bets on a series of Federal Reserve rate cuts. Every major group in the US equity gauge rose Thursday, while Treasuries saw small moves. Swap contracts priced in slightly higher odds of a half-point Fed reduction next week after a Wall Street Journal report said policymakers were considering whether to cut by 25 or 50 basis points. German bunds snapped a seven-day winning streak after the European Central Bank’s Christine Lagarde said rates will be sufficiently restrictive in the wake of an expected quarter-point interest rate cut.
Asia & Overnight
The dollar on Friday slumped against the yen while gold hit an all-time peak as investors ratcheted up bets for a super-sized Federal Reserve interest rate cut next week after media reports suggested the decision was a tough one for officials.
Shares in Asia also advanced after traders raised bets back to 41% for a 50-basis point U.S. rate cut on Sept. 18, according to LSEG data at 0155 GMT, from about 28% before articles in the Financial Times and Wall Street Journal each called the decision "a close call".
The euro added 0.09% to $1.1084, building on Thursday's 0.57% advance after European Central Bank President Christine Lagarde pushed back on prospects of a rate cut in October, following a widely expected quarter-point reduction on Thursday.
Gold extended Thursday's 1.9% climb to reach a fresh record high of $2,567.93, buoyed by the dollar's weakness.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.53%.
Japan, mainland China and South Korea are all heading into long weekends, with Tokyo back on Tuesday, China on Wednesday and South Korea not until Thursday.
U.S. stock futures were flat following gains on Thursday for the cash indexes.
Crude oil continued to climb after surging around 2% overnight, as producers assessed the impact on output after Hurricane Francine tore through the Gulf of Mexico.
U.S. West Texas Intermediate crude futures rose 0.54% to $69.34 per barrel, building on Thursday's 2.5% rally. Brent crude futures added 0.47% to $72.31, after a 1.9% jump in the previous session.
FTSE 100 technical analysis for today, 13th September 2024
Decent bounce off the 8230 level once the 8260 support was broken, and the bulls have managed to keep it above the 8200 so far this week. That said, 8220 is showing as initial support for today with the S1 and key fib here, along with the green 2h coral support line. If the bears were to break this (and if you're superstitious, being Friday 13th, it may be more negative) then a slide down to 8202 for the next main daily support level would likely happen.
Below that then the 8144 level is next up as major daily support, and just above the S3 level at 8131. I don't think we will get this low though today and whilst we may have a bearish day, I think that the 8200 area will likely hold.
The bulls need to break above the daily 25ema really which is at the 8264 area still, and possibly get in a test of the 8290 daily resistance. Above that then the 8332 level remains as resistance and 8352 for R2. Again, I don't think we will get that high either!
We may well see some profit taking later ahead of the weekend as well, which would fit with a copy of the ASX200 move, essentially a rise and dip. No major news out today but we have the UK interest rates next week, likely to remain as is.
The daily chart remains slightly negative with the bearish EMAs and declining Raff channels as the traditionally weak September continues to play out. The top of the 10d Raff is just below R1 as well being 8300 so it will be interesting to see off the bulls can break that area, if they manage to get it to the 8290-8310 area. Worth a short here if so though.
Good luck today and have a great weekend.
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