Technical analysis for FTSE 100 for 2nd January 2024
Asian shares started the first trading day of the New Year on a steady footing on Tuesday, as investors returning after a holiday lull looked ahead to fresh trading catalysts from key economic releases later in the week.
Chinese shares dragged down Asian equities on the first trading day of the year following weaker-than-expected factory data and a speech from President Xi Jinping that flagged the headwinds facing the economy. Crude oil rose. Hong Kong’s benchmark share gauge slid as much as 1.7%, while its peers in the mainland and Taiwan also dropped. The losses drove a regional equity benchmark toward its first decline in seven days.
Risk appetite was strong after global shares ended 2023 with their biggest annual rise in four years, driven by the prospect that major central banks globally could begin easing rates this year in a major boost for consumers and businesses shackled by high borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1% in early trade but was still hovering near a five-month high it hit last week.
Australia's S&P/ASX 200 Index peaked at 7,632.70 points, its highest since August 2021. Japan markets were closed for a holiday, which meant there was no cash trading of Treasuries either.
Market focus now turns to a slew of data due this week which will give further clarity on how much room there is for major central banks globally to ease monetary policy, and how soon those rate cuts could come.
FTSE 100 technical analysis for today, 2nd January 2024
Happy New Year! Off we go for 2024 with the FTSE managing to hold above the 7700 level to end 2023 fairly optimistically. Bit short of the 8000 level but the momentum remains upward looking at the Raff channels across the board. More of the same this year with a presidential election thrown into the mix in November. And probably a Labour government in the UK this year too....
Anyway, for today it looks like we will get a rise towards the 7760 level to start with and a possible drop off from here, as we saw over the Christmas break. This level is the line in the sand that the bulls will need to break for a push higher. Above the 7760 level then R3 is close at 7773, and then of course the round number at 7800.
Ultimately the bigger picture is flagging up the 7869 level as an important daily level that we may well see soon, and I expect also a retest of the 8000 level this year, probably in Q1 at some point. The top of the Raff channels are around the 7900 level for the short term as well. If we were to break 8000 anytime soon then 8070 is a potential target.
Support wise for today we have the daily pivot at the 7730 level and have been tracking the 30m green coral line steadily for the moment, with support on that at the 7735 level. Slightly lower we have the 30m 200ema at 7725 and I would like to see this hold really for a push up towards the 7760 level.
Given the break everything is a bit compressed in terms of support and resistance levels, so it may well take a couple of sessions for things to settle back into their rhythm. As such I will keep this fairly brief but keep an eye on the key levels and the trade plan.
Good luck today and welcome back!
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