Technical analysis for FTSE 100 for 18th December 2023
The FTSE 100 fell on Friday led by a drop in pharma and biotech stocks, but both the major equity averages managed to eke out some gains for the week that was dominated by interest rate decisions from major central banks. The blue-chip FTSE 100 slid 1.0%, and the FTSE 250 midcap index edged 0.3% lower.
Investor sentiment was bolstered this week after the U.S. Federal Reserve signalled that it could pivot to rate cuts next year, leading to the exporter-heavy FTSE 100 logging its third straight weekly gain, while the mid-cap index posted sharp weekly advances as well.
However, the Bank of England and the European Central Bank both hinted on Thursday that rates would remain higher for longer. Goldman Sachs said it expects the BoE to deliver its first rate cut in June, compared to a previous expectation of August.
Asian stocks fell the most in about two weeks after Federal Reserve officials pushed back against bets of aggressive interest rate cuts next year. The MSCI Asia Pacific Index lost as much as 1.1%, the biggest drop since Dec. 5, led by a near 1% drop in Hong Kong. US futures edged higher after the S&P 500 ended a six-day rally. The dollar was steady while two-year Treasury yields reversed gains made on Friday, when New York Fed President John Williams led a chorus of officials in saying it’s too early to begin thinking about lowering borrowing costs.
FTSE 100 technical analysis for today, 18th December 2023
We got a fair old slide on Friday which has seen us drop down to the 7550 area to test the support level that we have here. The bulls will be gutted that they haven't been able to keep it around the 7700 level that we spiked to on Thursday, so they will likely be trying to get the "Santa Rally" this week and try and push it back up.
The Raff channels continue to head upwards so there is still the long bias, and this is the last trading week prior to the break. Ergo we should have a more bullish overtone. That said, the 2h chart is bearish for today following Friday's drop, and has resistance at the 7630 level - this is the key resistance for today so should we get a rise to this area then a short here is worth a go.
7633 is also R1 for today and a rise and dip would pan out well for a Monday. Above this then the 7661 is the key fib, which whilst possible, feels a bit of a big ask for today. Will also be lower volume this week.
On the support side, then we have 7550 to start with, and the key fib here as well. It's also held ok overnight. Below this then the 7520 is the daily 200ema and also another test of the daily 25ema, along with daily support here. Should we see this level then a long here is also worth taking.
Lower down and if the bears were to break 7500 a slide down to 7450 would probably play out and really scupper the bulls for the moment. As such I think that we are not likely to slide that low.
The US bulls will also be trying to push it up this week, and with the Dow making recent record highs a push a bit further could well play out - positive headlines going into the break then. 4742 is the S&P500 Hull MA resistance to start with so the bulls will be aiming to break that, while 4710 is 2h coral support. With this just above the round number any drop down to there is likely to be defended. Again the Raffs are heading up as well, so the long bias remains on that too.
So looking like a rise and dip really today, with the 7550 level holding as support to start with. Good luck today.
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