Dow hits 40000 | FTSE100 bearish | 8426 8458 resistance | 8401 8382 support

Dow hits 40000 | FTSE100 bearish | 8426 8458 resistance | 8401 8382 support

Technical analysis for FTSE 100 for 17th May 2024

Britain's FTSE 100 closed slightly lower on Thursday, as disappointing news from EasyJet and Sage Group offset a surge in BT Group after the telecoms group's new boss unveiled steps to boost its cash flow.

The blue-chip FTSE 100 slipped 0.1% after hitting a series of record highs in recent weeks on hopes of monetary policy easing from major central banks and positive corporate earnings.

Bank of England policymaker Megan Greene said the central bank should wait for more conclusive evidence that strong inflation pressures were becoming less stubborn before it moved to cut rates. The Bank of England will start bringing down interest rates in August, a slim majority of economists polled by Reuters projected.

The Dow Jones industrial average crossed the 40,000 level on Thursday for the first time and a world stock index scored a third straight record intraday high on hopes of U.S. interest rate cuts and strong earnings before stocks turned mostly flat in afternoon trading.

Data on Wednesday showed cooling consumer price inflation, although that was offset on Thursday by news that U.S. jobless claims fell in the latest week and by figures showing U.S. import prices increased 0.9% last month.

Asia & Overnight
Asian stocks inched lower on Friday as traders pondered the near term U.S. monetary policy path after Federal Reserve officials suggested that interest rates may need to stay higher for longer even as inflation shows early signs of easing.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.14% after touching a two-year high on Thursday. The index was still set for an increase of 2.6% this week for its fourth straight week of gains. Japan's Nikkei fell 0.48%, while China stocks moved higher, with the blue chip gauge gaining 0.15% in early trading. Hong Kong's Hang Seng Index was the bright spot for Asia, rising 0.77% and touching its highest since August 2023.

Data on Thursday showed the number of Americans filing new claims for jobless benefits fell last week, indicating that labour market conditions remain fairly tight even as job growth is cooling.

Overnight, the Dow rose as high as 40,051.05 while the S&P 500 and Nasdaq also hit record highs before gradually losing steam and finishing slightly lower on the day.

In commodities, oil prices rose in Asian trading hours, with global benchmark Brent set for its first weekly increase in three weeks on signs of improving global demand and slowing inflation in top oil consumer the United States. U.S. crude was little changed at $79.18 a barrel and Brent was 0.1% higher at 83.35 per barrel.

FTSE 100 technical analysis for today, 17th May 2024

A bit weaker yesterday on the FTSE100 but the 8400 remains as support still. With it being Friday a bit more caution as per usual though we may well see a rise and dip play out. With the weaker session yesterday the 2h chart has remained bearish with the 8450 as the Hull MA resistance. The 2h coral has now also gone red for the first time in a while and has resistance at 8455.

As such should we see an early rally to this 8450 area we may well see a stall here. I have put the order just above this though as R1 is 8458 and 8471 is also showing as key daily resistance so we may well see a slight overshoot of the 8458.

If the bulls were to break above the 8471 then the next key area is the 8500 level, and would end the week fairly strongly following the US lead.

Support wise today, the 8420 level is key to start with and may well hold for that initial rise. Below this though and the 8385 level is support on the daily chart, along with the S2 and key fib also here as you can see in the table.

Should we see this area then I would like this to hold for a bounce ahead of the weekend, and to generate some more positive headlines.

Oil is sliding a bit and that may well temper the FTSE100 exuberance though in the short term (due to BP and Shell).

In the absence of any major news today we may well see a bit of a quieter one but do keep an eye on the 8460ish area, and also the 8385 for support.

Good luck today and have a great weekend.

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