Technical analysis for FTSE 100 for 7th September 2023
Inflation will fall markedly by the end of the year, Andrew Bailey has said, as he signalled interest rate rises are nearing their peak. The Bank of England Governor said rates were “much nearer now to the top of the cycle” following 14 consecutive rises in borrowing costs. Sterling slumped to a three month low of $1.25 against the dollar following his comments, while money markets slashed bets on another rate rise at the next meeting of the Monetary Policy Committee (MPC) later this month.
The FTSE 100 closed down 0.16pc at 7,426.14, while the FTSE 250 midcap index ended 0.21pc lower at 18,451.82.
Shares in Asia were broadly lower Thursday while the dollar strengthened further against major currencies as investors increased bets for further Federal Reserve policy tightening. Equities in Australia, South Korea and China fell, with the latter weighed down by property developers, which partly retraced a rally in the prior session. Shares in Japan gave up early gains to trade flat.
Asian stocks sank on Thursday, extending global equity declines after new signs of sustained inflationary pressures in the United States boosted the case for elevated interest rates for longer.
FTSE 100 technical analysis for today, 7th September 2023
A nice rise to and dip off the 7450 resistance level yesterday that looks like it might have the legs to drop off a bit further. Have been skimming some profit on the drop from there on our short, but will look to hold the reminder in case 7400 breaks convincingly to start with today.
Initially today we may see a little kick up as the bulls try and defend the 7400 level, but we have resistance at the 7433 level, and also slightly below that with the daily pivot at 7412.
We also have the as yet untested red 2h coral at 7450 which would also double top with yesterday should it get that high.
A break of the 7400 level could see the bears take it all the way down to the 7340 level where we have the next major daily support, but first up the 7375 level is S1 and the bottom of the 10d Raff channel. 7355 is between them with the key fib here.
It does look like we may well get a dip and rise across the board today with a test of some key supports on the Dax and S&P500 at 15620 and 4435 respectively. The bounce yesterday off 7375 shows that there is still some buying appetite, though it is tending to fizzle out fairly quickly as well.
The FTSE 100 charts remain pretty bearish for the moment, and looking at the 2h chart, the bulls will really need to break above 7450 and hold that for the worm to turn. A pause in rate rises may well see that start to happen, and positive rhetoric from Andrew Bailey yesterday that inflation should continue to fall (but a slight uptick due to petrol in August) may well lend weight to the BoE pausing, at least for a couple of months. The rate rises are certainly starting to filter through anyway, and consumer spending feels like its slowing down.
So, could be a slightly interesting one today. Expecting a dip and rise, but watching the 7375, 7355, 7340 for support. 7430 7455 for resistance.
Good luck today.
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