Technical analysis for FTSE 100 for 15th July 2024
London stocks ended the week on a positive note, as investors shrugged off slightly higher than expected U.S. producer prices, maintaining hopes for a September rate cut by the Federal Reserve.
The blue-chip FTSE 100 index was up 0.4%, after hitting a one-week high earlier in the session. The domestically-focused mid-cap FTSE 250 closed 0.1% higher at 21,202.89 after touching a more than two-year high on Thursday.
Both indexes notched a second consecutive week of gains and extended their winning streak to a third straight day.
Investor sentiment was buoyed globally by increased bets of an interest rate cut by the Fed in September, after data showed a surprise drop in U.S. consumer prices for June on Thursday.
The producer price numbers in the U.S. did little to change bets around a rate cut by the Fed by September - traders are still pricing in a 95% chance. As earnings season commences in major economies, investors will keep an eye on quarterly results to gauge the state of corporates.
Positive FTSE100
Investors are looking at UK markets as a potential haven as political uncertainty rises in the U.S. and elsewhere in Europe, in what could mark a stunning turnaround for a country that appeared to have lost its traditional appeal to global capital.
A landslide election victory for Britain's centre-left Labour government last week offers the prospect of predictable policy and improved trade with the European Union to reboot an economy that has struggled since the 2016 Brexit vote.
Meanwhile, parliamentary gridlock in debt-laden France has stirred memories of previous euro zone crises, and investors are scrambling to guess what former U.S. President Donald Trump regaining the White House might mean for markets.
Britain's economy is picking up, and some bankers expect a revival for UK stock markets shrivelled by relentless selling during years of turbulence under successive Conservative governments.
Asia & Overnight
U.S. bond futures slipped and the dollar firmed on Monday as investors wagered the attack on U.S. presidential candidate Donald Trump made his victory more likely, while injecting a whole new level of political uncertainty into markets.
A holiday in Japan made for thin trading conditions and the early action was confined to a modest rise in the dollar while Treasury futures slipped.
Investors have tended to react to the prospect of a Trump win by pushing Treasury yields higher, in part on the assumption his economic policies would add to inflation and debt.
S&P 500 futures and Nasdaq futures were both marginally higher.
Disappointing data began a busy week in China, where a once-in-five-year gathering of top officials runs from July 15-18. Second-quarter growth in the world's second-largest economy was 4.7% higher than a year earlier, against forecasts for 5.1%, and retail sales growth was a sluggish 2% annualised in June, against expectations of 3.3%, keeping pressure on Beijing to come up with support measures.
Later this week, the United States will release data on retail sales, industrial production, housing starts and weekly jobless claims.
Federal Reserve Chair Jerome Powell will appear later on Monday and is bound to be asked for his reaction to last week's subdued inflation reading.
Brent gained 8 cents to $85.11 a barrel, while U.S. crude rose 8 cents to $82.29 per barrel.
FTSE 100 technical analysis for today, 15th July 2024
Be a few sore heads this morning I expect after the football..... Anyway, the FTSE100 2h chart is more optimistic to start with and has Hull MA support at 8220, along with a green coral at 8210. As such we could see an early drop down to here then a bounce up towards the 8300 level. There are more news items appearing about investing in the UK markets as its a bit of a safer bet at the moment, and having been unloved for so long, now has some value for a decent rise.
If the 8220 level does hold then ultimately I am looking for a rise to test the 8300 area, and we have the key fib at 8295 today, and 8304 for R2. The S&P500 2h chart has also gone bullish to start with so if that can hold the 5621 level then we should see some bullishness today. Bull Monday would be good!
Prior to the 8205 level then the 8251 is the 30m coral and red, so we could possibly see a stutter here.
If the bears were to break below the 8210 level then 8185 is the next key area with the daily support, S2 and 200ema all here. As such the bulls would be keen to defend this as a break would then likely lead down to the next daily level of note at 8107 and a likely bounce level.
Not that I think it will, but should it break above the 8300 level then 8327 is the red daily coral and the R3 level for today so would be a tough nut to crack without a major catalyst.
The 10d Raff channel continues to head up for the FTSE100, and we are on the cusp of the daily EMAs turning bullish again - up to the bulls really to make it stick this week. The Raff channels for the Dax40, S&P500 and NASDAQ are all heading up as well, which should bode well for more upside this month - seasonality of course traditionally indicating a bullish July.
We have Powell talking again later at 17:30, with US retail sales out tomorrow.
Good luck today.
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