If the bulls defend 8250 then 8300 on the cards | 8326 resistance | 8202 support

If the bulls defend 8250 then 8300 on the cards | 8326 resistance | 8202 support

Technical analysis for FTSE 100 for 16th September 2024

Precious metal mining stocks lifted London's blue-chip index on Friday as investors raised their bets on a hefty U.S. interest rate cut next week, but gains were limited as a strong pound weighed on export-oriented companies.

The FTSE 100 edged up 0.4%, while the mid-cap FTSE 250 rose 1%. Both stock indexes registered a weekly advance, led by an over 19.5% rise in precious metal mining stocks over the week.

The index climbed over 6.8% to its highest level in over 15 months. Gold miners Fresnillo and Endeavour firmed 5.7% and 10.5%, respectively, as gold scaled a record high against a weaker greenback.

Gold prices rose as optimism about the Federal Reserve cutting U.S. interest rates increased, driven by fund inflows and a weaker dollar.

Sterling touched a one-week high against the dollar after the Wall Street Journal and Financial Times reported it might be a close call on whether the Fed cuts rates by 25 basis points or by 50 bps at its meeting next Wednesday.

That prompted traders to boost their expectations of a steeper 50 bps rate cut to 43% from just 14% a day earlier, CME's FedWatch tool showed.

Meanwhile, the British public's expectations for inflation over the coming year dropped to their lowest in three years in August, likely reassuring policymakers ahead of next week's interest rate decision.

The Bank of England is expected to keep rates on hold in its upcoming meeting, according to a Reuters poll of economists.

Asia & Overnight
Asian stocks made a cautious start on Monday in a week that is almost certain to see the start of an easing cycle in the United States with the only question mark being the size of the cut, with markets split on the chance of an outsized move.

Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes U.S. retail sales and industrial production.

Geopolitics loomed large as ever with Republican presidential candidate Donald Trump the subject of a second assassination attempt on Sunday according to the FBI.

Holidays in China, Japan, South Korea and Indonesia made for thin conditions and early moves were modest. MSCI's broadest index of Asia-Pacific shares outside Japan was nearly flat, after bouncing 0.8% last week.

Japan's Nikkei was shut but futures traded at 36,315 compared to a cash close of 36,581 as recent yen gains pressured exporters. S&P 500 futures were little changed, while Nasdaq futures dipped 0.1%.

EUROSTOXX 50 futures and FTSE futures were a fraction firmer.

Oil prices edged up as nearly a fifth of crude oil production in the Gulf of Mexico remained offline. Brent rose 19 cents to $71.78 a barrel, while U.S. crude firmed 28 cents to $68.93 per barrel.

FTSE 100 technical analysis for today, 16th September 2024

A bullish end to the week on Friday which should roll through into today, at least initially. The focus this week is on the Fed and rate cuts (or not) on Wednesday. Thursday is then the BoE's turn and likely to hold at 5% this month.

Initially today we may get a drop down to the the 8260 area where we have the 30m 200ema and Hull MA to support things at the start. However, a break of this and then the bears will be looking to regain control and a slide down to the 8205 S2 and daily support area would be on the cards.  As such, worth shorting a break of the 8255 level.

After Friday's rise in the afternoon, the 2h chart is looking more bullish so that 8260 level is pretty key to start with and a hold of the HulL MA.

Resistance wise, then the bulls will be looking to break 8290 again and ideally hold above it. However we then have R1 at 8303 so pretty close, as well as Thursday's high here too from last week. If they manage to break above that then R2 and the key fib at the 8326 level looks likely. It's worth a short here as 8332 is also daily resistance.

If the bulls have a good week then we may well see a rise towards the 8400 level play out later in the week - probably helped by the Fed cutting rates on Wednesday evening.

The daily chart has weakened off a bit though, with both the Raff channels heading down now, and the EMAs flirting with a weak bearish set up at the moment. The bulls will therefore really need to break and hold above the 8300 level to continue the bullish bias.

So, let's see if we get a rise and dip today with a bit of Bull Monday to start with. Good luck!

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