Technical analysis for FTSE 100 for 20th October 2023
The FTSE 100 has closed1.17pc lower at 7,499.53, while the FTSE 250 midcap index shed 1.09pc to finish at 17,213.14. The UK’s blue chip index was also dragged lower by a 14.3pc fall in Rightmove after a near £100m takeover was agreed for rival OnTheMarket. The heavyweight oil and gas sectoral index was down 0.66pc, tracking oil prices lower.
Asian stocks fell as volatility gripped global markets from an escalation in tensions in the Middle East, driving oil and gold to further advances. MSCI’s Asia Pacific Index – a gauge for benchmarks in the region – lost 0.2% and is set for its biggest weekly drop in two months. China stocks pared earlier losses as policymakers pumped a record amount of short-term cash into its financial system while contracts for US equities declined.
Asian shares plumbed a fresh 11-month trough on Friday as fears of a regional conflict in the Middle East intensified and as a relentless rise in long-term U.S. yields pressured valuations, while supply concerns lifted oil prices further.
A much-watched speech overnight from Federal Reserve Chair Jerome Powell led to a choppy market response, although most investors leaned further into bets that the Fed will extend its rate pause in November.
FTSE 100 technical analysis for today, 20th October 2023
7490 held as support yesterday however its been broken overnight which opens up a test of the 7440 level next. We also have S1 at 7432 just below that so a drop down to here to start with before more upside towards the daily pivot at 7510 may well materialise this morning.
There was a brief moment of optimism yesterday as Powell was speaking that saw the S&P500 spike up to test the Hull MA at the 4340 level however it was short lived and the bears resumed the downward pressure. Seasonality continues to play out really, as the markets slide towards the end of the month. The Geopolitical situation is providing the catalyst though it is going to be interesting to see how it all pans out over the next few weeks. Step back or worse?
If the bears break below the 7440 level then 7391 is S2 and would more than likely be seen, and that is also just above the 20d Raff channel bottom. Both the Raff channels have leveled off now given the recent weakness, though the 10d lines up with that S1 7432 level as well.
The 2h chart is also bearish as you would expect, with the Hull MA showing resistance at the 7540 area.
7510 is initial resistance this morning as mentioned, then that 7540, with a cluster of resistance levels above that at the 7565 area – R1, 30m 200ema, and the key fib are all in this area so should it get this high then a short here is probably worth a go.
UK retail sales have declined data released this morning shows as well.
As it’s Friday we may well see any rally later get sold into as we get profit taking ahead of the weekend. It’s also option expiry today so watch for the volatility at 10:10 this morning.
Generally it’s looking like a rise and dip once again, which given the back drop is probably not too surprising and has been the pattern all week.
Good luck today and have a great weekend.
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