Technical analysis for FTSE 100 for 26th March 2024
The UK's blue-chip FTSE 100 eased on Monday as investors digested recent gains on dovish pivots from major central banks, while Direct Line slumped as Belgian insurer Ageas abandoned its buyout plans for the firm.
Direct Line shed about 11% after Ageas SA said it did not intend to make further offers for the British home and motor insurer following two failed attempts. The stock logged its worst day in more than a year, helping to drag the FTSE mid-cap down 0.6%.
The FTSE 100 of top British firms dipped 0.2% to 7,917.57 points, led by losses in chemicals and automobiles and parts.
Last week, the FTSE 100 index notched its highest close in a year as investors cheered the Bank of England and the U.S. Federal Reserve signalling interest rate cuts this year. The UK benchmark index is headed towards its third quarterly gain.
Focus will now shift to the U.S. core personal consumption expenditure price index, the Fed's preferred inflation measure, due on Friday, to further gauge the trajectory of inflation and interest rates.
Among bright spots were energy shares which rose 0.9% as crude prices climbed on supply concerns brought as hostilities intensified between Russia and Ukraine and in the Middle East.
Overnight
Asian equities climbed on Tuesday but could not break this month's highs as mixed messages from U.S. Federal Reserve policymakers left doubts hanging over the timing of interest rate cuts.
The risk of Japan intervening to prevent further falls in the yen put a little pressure on the dollar, however it rose against the yuan on speculation that China may tolerate a weaker currency.
Overnight, Chicago Fed President Austan Goolsbee said he had pencilled in three rate cuts this year, while Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic re-iterated Friday remarks trimming his expectations to one cut. The diversity of views throws a few wildcards into the policy outlook while markets wait on the next U.S. inflation indicators due when many markets will be closed for Good Friday.
Interest rate futures price about three Fed rate cuts this year and about a three-in-four chance of the first cut in June.
S&P 500 futures rose 0.1% and the cash index closed 0.3% lower overnight.
FTSE 100 technical analysis for today, 26th March 2024
The bears are just trying to break it down below 7900 to start with and we may well see a slide down towards the 7860 support area this morning as we start off with a bit of a bear Tuesday. 7889 is the green 2h coral so this will be the first level that they will need to break.
There are a cluster of supports at the 7860 level with the S2, key fib and 30m 200ema all here. As such we may well see a bounce here if the bulls defend today. Ultimately they will be looking to break and hold above the 7900 level to continue targeting the 8000 level. As per yesterday's missive, the bias is still bullish so buying the dips on the longer timeframes is still the preferred play.
If the bears were to break below the 7850 level then 7835 S3 and daily support would be next and I would like to see a bounce here. If we see this today then a long here is also worth a go.
Resistance for today is initially at the 7912 level where we have the 30m coral and the daily pivot, and we may well see a slide start from here. Above this though and then the now bearish 2h chart has 7945 as Hull MA resistance and we could see any rise falter here. Initially though I think we will be getting a dip and rise day today.
7936 is also R1 so just below that resistance level, while R2 is 7963. At 1230 we have Durable Goods data out in the US and that may well provide a catalyst for the bulls if it comes in positive. The forecast is for an improvement to 1.1% from -6.1% previously.
So generally expecting a bit of a bear Tuesday, at least initially. Good luck today.
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