Technical analysis for FTSE 100 for 20th September 2023
The FTSE 100 closed 7 points or 0.095pc higher at 7,660.20 after a choppy trading session. The FTSE 250 closed 0.12pc lower at 18,426.7. Investors remained cautious ahead of inflation data and the Bank of England’s interest rate decision, while surging oil prices has fuelled inflation concerns.
Asian stocks struggled for headway on Wednesday while 10-year U.S. Treasury yields stood at 16-year highs as surging oil prices drive inflation and set the scene for the Federal Reserve to project interest rates staying higher for longer.
Brent crude futures eased from 10-month highs overnight but at $94.26 a barrel are up 30% in three months thanks to Saudi Arabia and Russia vowing to extend output cuts.
Futures pricing implies almost no chance of a Fed hike at 1800 GMT, but traders, who have begun winding back bets on cuts in 2024 and will be closely focused on the U.S. central bank’s economic projections and chair Jerome Powell’s news conference.
The Fed meeting leads a week jammed with central bank meetings and data over the next few days. British inflation figures are due on Wednesday, followed by central bank meetings in Sweden, Switzerland, Norway, Britain and Japan on Thursday.
FTSE 100 technical analysis for today, 20th September 2023
Inflation unexpectedly fell last month despite fears about rising petrol prices ahead of the Bank of England’s next decision on interest rates. The consumer prices index (CPI) dropped to 6.7pc in August, down from 6.8pc in July, according to the Office for National Statistics.
The Bank’s own forecast previously predicted that CPI inflation would rise to 7.1pc. The fall came even as motorists contended with rising fuel prices amid a global surge in the price of oil, driven by supply cuts in Russia and Saudi Arabia.
Bank of England Governor Andrew Bailey had suggested earlier this month that inflation could increase given that prices went down in August last year but up this August.
Policymakers will decide whether to raise interest rates from 5.25pc on Thursday.
That has seen a kick up in the 7am pre market and a rise towards the 7710 resistance level looks to be in play now. We do of course have the Fed rate decision today, with the forecast for it to remain at 5.5%. The pressure will be on the BoE to keep rates on hold now too given that data and if the Fed also hold.
7709 is the key fib to start with and also the 2h Hull MA resistance area and we may well see buy the rumour sell the news play out today. The Fed data is out at 19:00 though so we have all day to wait. Above the 7710 level then 7722 is R3.
If the bulls were able to hold above the 7700 level though, then it does keep that next, much higher. daily resistance level of 7800 in play, though a double top with 7745 is also likely to get a reaction. The bulls will certainly be trying to capitalise on that CPI news out today.
Support wise, then the 7640 level is S1 and has also held well overnight, as we have the bottom of the 10d Raff channel here for today as well. 7644 is the 30m 200ema as well. As such, this looks to be decent support but a break of this will likely lead to the 7606 daily support level being tested, and if it were then a long here is worth a go.
The S&P500 is likely to put in a rise and dip today, and I am looking at the 4465 resistance level where we have the red 2h coral, and just above the Hull MA as well. R1 is also at this level, along with the 25ema on the now bearish daily chart. As such a short here his worth a go and in theory should get a reaction.
For the Dax40, the 15800 is resistance on the 2h chart and again, a rise to here then a drop would fit the chart well. 15787 is also the key fib for today.
Good luck today.
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