Technical analysis for FTSE 100 for 19th December 2023
The FTSE 100 climbed on Monday as heavyweight energy stocks rose, tracking strength in crude oil prices, while Vodafone shares topped the list of gainers after telecom firm Iliad submitted a proposal to create a joint venture in Italy. The blue-chip FTSE 100 gained 0.5%, while the more domestically focused FTSE 250mid-cap index edged 0.1% higher.
Vodafone jumped 3.9% after Iliad said it submitted a proposal to the telecom company to merge their Italian businesses.
Heavyweight energy stocks added 1.5%, tracking a jump in crude oil prices, as mounting attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea disrupted maritime trade.
Looking ahead, data due this week includes domestic and euro zone inflation, along with GDP estimates from Britain and the U.S.
The FTSE 100 is extending three consecutive weeks of gains on the back of hopes that the U.S. Federal Reserve could consider cutting interest rates soon.
Tempering some of those expectations, Atlanta Fed President Raphael Bostic pushed back on Friday saying the U.S. central bank can begin reducing rates "sometime in the third quarter" of 2024 if inflation falls as expected. New York Fed President John Williams has also sought to cool rate-cut forecasts.
In economic news, Germany's business climate faced an unexpected drop in December, as both current conditions and future confidence indicators dipped. The IFO Institute's business climate index, a monthly survey encompassing approximately 9,000 German manufacturing, services, trade, and construction businesses, dropped to 86.4 for the month, down from a revised 87.2 in November. That fell short of the anticipated 87.8 and marked the lowest reading in three months.
FTSE 100 technical analysis for today, 19th December 2023
We got the range yesterday as expected between 7550 and 7625, and weren't able to break either. With the bulls testing the 7625 area area again to start with today we may well see a rise and dip play out again as more Santa Rally cheer follows though. Initially today we may well therefore get a rise towards the 7680 area to test R2, though we also have the 7650 area in play with R1 and the key fib here.
The ASX200 had a positive day and therefore we may well follow suit. The 30m coral is green to start with for support at the 7612 level and then the daily pivot and the 30m 200ema at the 7600 level.
As such, the bulls will be keen to defend this for a push up today and another crack at the 7700 level, ideally this week.
Below the 7600 level then 7550 remains, with 7520 rather more pessimistically below that. With the S2 and also daily support here then a bounce would be quite likely should it get that low today. The Raff channels and sentiment are still bullish though so I am more inclined to expect a bit more bull today. At least for the bulk of the day.
At 10am this morning we have the Eurozone inflation figure out, with a forecasted drop to 3.6% from 4.2% previously. The markets would be quite happy with that result.
Not too much more to say really, keep an eye on the key levels once again - 7600, 7570, 7550 as support, 7650 and 7685 as resistance.
Good luck today.
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