Technical analysis for FTSE 100 for 13th September 2023
London's FTSE 100 rose on Tuesday as the pound fell after data showed Britain's labour market weakened in July, even as wage growth stayed strong
The exporter-heavy FTSE 100 index closed up 0.4%, gaining for the fourth straight day amid the weaker pound. Mid-cap stocks rose 0.1%.
Data showed Britain's unemployment rate ticked up to 4.3% in the three months to July, from 4.2% in June. However, average weekly earnings growth climbed to 8.5% in annual terms, up from 8.4% a month earlier and marking a new high, excluding distortions during the COVID-19 pandemic, in records dating back more than 20 years.
Asian shares were subdued after Wall Street wobbled overnight with markets bracing for key U.S. inflation data on Wednesday, while an oil price spike stoked anxiety about persistent price pressures, complicating the interest rate outlook.
Stocks fell across Asia as oil prices extended gains ahead of a key US inflation report that may give a better guide on Federal Reserve’s policy outlook. An Asian equity gauge headed for the lowest close in almost a week, with techfirms in Japan and China leading the drop in a sign of nervousness about a potential consensus-beating US consumer price reading. The sector’s weakness prompted Hong Kong and mainland Chinese shares to swing to losses even as developers rallied on news that Country Garden Holdings Co. won creditor support to extend repayment on seven yuan bonds.
FTSE 100 technical analysis for today, 13th September 2023
It's all eyes on the US inflation data out at 1330 today which is likely to drive most of the moves today across the board. The forecast is for the inflation rate YoY to have ticked up to 3.6% from 3.2% previously.
UK GDP data has just come in below forecast too, with YoY down to 0%. The bulls continue to struggle to really defend the 7500 level and the 7550 level capped the rise once again yesterday. The more it tests that level though then the more likely it is to break.
Initially today we may well get a kick up to test the daily pivot and red 30m coral line at the 7525 level. We also have resistance here from the Hull MA on the 2h chart so we could then see the bears reappear here for a drop down towards the 7460 level.
Above 7525 then 7550 as mentioned, and above that 7595 remains as daily resistance. Prior to that R2 is at 7577 and also the key fib. Could be worth a short here too. Might be a big ask for today to try for 7595 but we shall see. The bullishness on the US might not kick in till tomorrow/Friday if the usual patterns are going to play out. Wednesday is usually weaker.
7460 looks to be decent support with the first test of the bullish 25ema on the daily chart here, and also just below R2 at 7469. The bulls will be trying to defend today having fought hard to get the rise from 7400 playing out.
Prior to 7460 we have the green 2h coral at 7487 which has held overnight, along with the 30m 200ema here. Another reason to think that we will get a rise off this to start with today.
Below 7460 then the bears will be aiming for the 7400 area, which is just below the bottom of the 2 Raff channels as you can see on the daily chart. I am not expecting it to get that bearish today though (famous last words again!).
On the S&P500 the 4470 area is resistance and the 4437 is support so keep an eye on these.
The Dax40 also has a bearish 2h chart now and the Hull MA at 15740 ties in with the daily pivot and 30m 200ema also here, as such I would expect to see a bearish reaction here if we get a rise to this level.
Good luck today.
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