Technical analysis for FTSE 100 for 18th October 2023
The FTSE 100 closed 0.58pc higher at 7,675.21, while the FTSE 250 midcap index closed 0.97pc higher at 17,689.46.
Asian stocks declined as better-than-expected China data failed to dispel concerns over the country’s economic outlook, while intensifying Middle East tensions kept sentiment in check. Hong Kong’s equity indexes erased a brief rally spurred by a slew of economic data beats, pointing to still-fragile sentiment. China’s economic growth and retail sales suggested the economy is finding a foothold, while the property market remained a drag. Onshore Chinese benchmarks and US futures remained in the red. Stocks in Australia and South Korea fluctuated.
Asian shares steadied on Wednesday as Chinese economic data suggested Beijing’s stimulus measures might finally be gaining traction, only to be overshadowed by fears of a widening conflict in the Middle East that lifted oil prices.
Global bond markets were also still nursing heavy losses as strong U.S. retail data argued for a punishingly long stretch of high rates. The outlook for the world economy did seem to take a turn for the better as China reported annual economic growth of 4.9% in the third quarter, beating forecasts for 4.4%.
FTSE 100 technical analysis for today, 18th October 2023
Finally tested the 7700 level after the bell whereupon the bears had a good go but the bulls have fought back and we have a likely test of 7710 this morning on the cards. 7707 remains the daily resistance level, while 7710 is R2 and then the key fib at 7721. As such an early test of this area may well then see another drop off to test the pivot at 7664.
It possible that today may be more bullish in fact and a rise than to test the 7750 area may well play out. The S&P500 defended well against the bears, holding the 4340 level, and the past 2 daily candles have decent tails on them suggesting strength. How long it lasts though remains to be seen as we are reaching the turn point for October based on the seasonality – usually a rise and dip playing out over the month.
Above 7710 then 7748 as mentioned, and above that then the 7813 level remains. We also have the 10d Raff channel continuing to head up though 7777 is the top of the 20d Raff for the moment. I don’t expect to get that high today though!
Below the daily pivot at 7663 then the bears will be aiming for the 7638 area where we would test the 30m 200ema, and then 7625 S1 below that. It’s worth noting though that the 2h chart is bullish currently with both the green coral and the Hull MA giving support at the 7660 area.
If the bears were to break 7625 then 7579 is S2 though again, I don’t expect a drop down to this level.
Generally today then it looks like we may well see a bit more upside, and the bulls will certainly be keen to break and hold above the 7700 level.
Meanwhile on the news front UK annual inflation was unchanged in September 2023: Consumer Prices Index including owner occupiers’ housing costs rose by 6.3% in the 12 months to September, unchanged from August while Consumer Prices Index (CPI) rose by 6.7%, unchanged from August.
Good luck today.
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