Technical analysis for FTSE 100 for 16th October 2023
US equity futures gained while Treasuries and the dollar slipped, in a sign that traders are weighing the efforts by the US and its allies to prevent further escalation of the Israel-Hamas conflict.
The run for haven assets seen last week eased as markets wait on further developments in the Middle East. Treasury 10-year yields rose five basis points on Monday after dropping 19 basis points last week.
On Friday, the pan-European STOXX 600 index lost nearly 1% and New York’s S&P 500 declined 0.5%, although U.S. stock futures pointed 0.2% higher on Monday.
FTSE 100 technical analysis for today, 16th October 2023
Despite the flight to safety on gold on Friday, equity markets have remained fairly resilient in the face of the various wars escalating. Probably as if it does escalate there isn’t an awful lot we can do about it! Initially today it looks like we may well see a rise and dip play out across the board, and the 7680 area is looking like decent resistance on the FTSE100 to start with.
7675 is the Hull MA and would be the first test since it went bearish, so in theory this should be a fairly strong line in the sand. Above this though and the bulls will be aiming to get 7697 and a test of the 7700 round number, with 7707 also just above here as resistance.
Support wise, we saw a great bounce off the 7600 level on Friday, and the bulls managed a decent run before the pre-weekend profit taking kicked in and took it back down to 7600. Nice double bottom formed there at that point and we have seen that strength follow through into this morning with it holding.
A break of the 7597 support level though and we will likely see a slide down to the 7565 area and a test of the lower daily support and also the 25ema on the daily chart. This area looks fairly key and a long here is worth a go as that would also be the first test of that 25ema since it went bullish.
We are also in the midst of the early October strength as well so could see a bit more upside still. It does feel like the bulls want to push on towards the 7700 and possibly a bit further, though that 7675 level remains key.
Above 7707 and they will likely push for a test of the R3 and 20d Raff level at 7720 – though that feels a slightly big ask for today but you never know as we have had a couple of +100 days last week.
Conversely, below the 7565 level we would probably see it get as low at 7530, and maybe even the daily coral once again at 7509. Again, I don’t think it will get to these extreme levels today though. Bull Monday after all!
The Dax40 and S&P500 also look like they are setup for a rise and dip today and watching the 15375 and 4376 levels respectively on them for a bearish reaction.
Good luck today.
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