Technical analysis for FTSE 100 for 14th December 2023
The FTSE 100 closed slightly higher on Wednesday as the pound slid following data showing the UK economy contracted in October, while markets awaited the Federal Reserve's rate decision later in the day. The blue-chip FTSE 100 index edged up 0.1%, with major dollar earners like AstraZeneca up over 2%. The more domestically-focussed FTSE 250 mid-cap index also rose 0.2%. Bucking the trend, shares of automobiles and parts fell to a one-month low, dropping 3.7%.
The pound tumbled and was last down 0.3% against the dollar at $1.2522, after official data showed Britain's economy shrank in October, raising the risk of a recession.
The BoE, along with the European Central Bank, will be releasing its rate decision on Thursday. Both are expected to hold rates steady. Separately, Goldman Sachs lowered Britain's 2023 economic growth rate forecast to 0.5%, from its previous outlook of 0.6%.
Stocks and bonds rallied after the Federal Reserve signaled interest-rate cuts next year, reigniting a bullish pulse across markets as inflation eases. A global gauge of stocks gained for a sixth straight session after the S&P 500 ended Wednesday within 2% of its record high and climbed further in Asian futures trading on Thursday. Apple Inc and the Dow Jones Industrial Averageboth hit record highs.
Asian stocks broadly rallied on Thursday, after the U.S. Federal Reserve flagged the end of its tightening cycle and struck a dovish tone for the year ahead. U.S. Treasury yields slid to a fresh four-month trough, while the dollar continued to slide.
FTSE 100 technical analysis for today, 14th December 2023
We have arrived at the 7625 level overnight with the bulls managing to defend the 7540 level yesterday. No overshoots down to the 7520 support level in what turned out to be a bullish Wednesday across the board following the Fed inferring about rate cuts next year.
With the test of this level we may well see an opening drop down to test the pivot at the 7585 level, and also a test of the now bullish Hull MA on the 2h time frame. A dip to this and then a bounce would actually fit pretty well as above 7625 we have a new target at 7750 to aim for, which is the high from September.
7636 is also the key fib to start with, and then R1 just above that at the 7648 level. As such a short this morning from this area may well bear fruit.
Above the 7650 area today then the bulls will likely manage to keep the momentum going and 7690 is in sight for today with R3 here. Feels quite the rise from 7540 yesterday though so might be a bit far, especially if the BoE leave rates unchanged today as is largely expected.
The Raff channels are all heading up across the board as well so the bias is still firmly bullish, and sets the tone for the bullish year end. 8000 still potentially on the cards for year end!
Support wise, then the 7585 level as mentioned is first up. Below that then the bears will be aiming for the 7555 level again as we have the 30m 200ema and S1 around here, with 7536 key fib below that. That would also then be a double bottom with yesterdays support level.
Generally today though I am expecting another bullish day with a dip and rise to play out, on both the FTSE100 and the S&P500.
Good luck today.
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