Technical analysis for FTSE 100 for 1st September 2023
The FTSE 100 missed out on a seven-day winning streak after sinking into the red. It was on track to record its seventh consecutive daily rise, which would have been its longest winning streak since April.
Companies on the internationally-focused index were initially boosted as traders cut their expectations for interest rate rises across the world. However, the FTSE 100 tumbled during afternoon trading to close down 0.46pc at 7,439.13. Weak data from China and mining stocks trading ex-dividend weighed down on the top index, while hawkish remarks from Bank of England’s chief economist Huw Pill dampened confidence.
Stocks in Asia rose and metals rallied as China ramped up stimulus to aid its ailing economy, while traders awaited Friday’s jobs reading to gauge the Federal Reserve’s policy outlook.
Asian shares edged higher on Friday as China stepped up efforts to support its housing sector and stabilise the yuan, though investors remained cautious ahead of U.S. jobs data that could make or break the case for further rate hikes.
U.S. consumer spending increased by the most in six months in July, but slowing monthly inflation rates cemented expectations that the Federal Reserve would keep interest rates unchanged next month. U.S August payrolls data tonight could offer more clues.
FTSE 100 technical analysis for today, 1st September 2023
Non Farm Payrolls news out today at 1330, along with the start of the new month which could well lend its self to buy the rumour sell the news playing out. We might see a bit of an optimistic session today, at least initially, and have already ticked up a bit from the lows at the close yesterday as the new month money flows in across the board.
The 7430 area has held overnight and should act as initial support today as well, as we have daily support just above here at 7440.
Should the bears break below 7440 then 7410 is locking in as the next daily level of note and just below yesterday's low. Should we get this low then I would like to see this hold.
There is a case for a bit of optimism today, though it may be tempered by the fact its the end of the week and also NFP. As such, next week may well see a stronger rally start to play out once again.
If the 7440 level does hold and we start to rise then 7500 is the first level of note, and having dropped off the 2h Hull MA at this yesterday it remains the resistance. A break of this should manage to push to the 7520-34 area where we have a test of the top of the 20d Raff channel and 7526 on the daily. 7534 is also the R2 level.
Will the bulls want to hold over the weekend? Probably not so some banking at this level later in the day would fit well, though they will be keen to defend the 7500 level if at all possible.
We are also just at the bottom of the 10d Raff channel as I write this so again, the bulls will need to be on the defensive to start with today and push the price up and away from this. The daily moving averages have swung up a bit more following the mid August sell off in a more positive sign for some upside.
So, could be an interesting one but with NFP stay cautious, can be a good day to be risk off a bit too.
Good luck and have a great weekend, see you in the chat room!
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