Technical analysis for FTSE 100 for 4th March 2024
UK equities rose on Friday, mirroring gains across global markets as investors cheered signs of slowing inflation in the United States, while broadcaster ITV rallied following the sale of its stake in BritBox International to BBC Studios. The internationally focussed FTSE 100 index closed 0.7% higher after ending February flat on the month.
Markets including Japan's Nikkei, Europe's STOXX 600 and New York's S&P 500 hit all-time highs, supported by an AI-inspired rally in technology stocks as well as favourable U.S. inflation data.
The FTSE 100, however, has lagged on the absence of major technology firms and concerns that the Bank of England may have to keep interest rates higher for longer.
BoE chief economist Huw Pill said he thought the time for the first rate cut by the central bank since the coronavirus pandemic remained "some way off".
Investors will shift their focus to UK Finance Minister Jeremy Hunt's pre-election budget this week, where he is expected to cut taxes in the face of a 2.5-trillion-pound debt.
Asia
Asian share markets firmed on Monday as the Nikkei reached another new high and investors braced for a week packed with central bank events and major data that will refine market wagers for when interest rates will start falling.
All eyes will be on Federal Reserve Chair Jerome Powell when he testifies before lawmakers on Wednesday and Thursday, though analysts assume he will stay in wait-and-see mode on policy given recent upside surprises on inflation.
The February payrolls report on Friday could also shift the calculus with forecasts favouring a still-solid rise of 200,000 after January's barnstorming 353,000 jump.
The European Central Bank meets Thursday and is considered certain to keep rates at 4.0%, but also lower its outlook for inflation in a nod to eventual cuts.
FTSE 100 technical analysis for today, 4th March 2024
A great bounce off the 7650 level on Friday however the bulls still haven't recaptured the 7700 level. If they manage today then it may well stall just above as we have some key resistance at the 7715 level and also the top of the 10d Raff at 7722. As such, we may well see a rise and dip today as we start off with a bull Monday but weaken later.
Initial support is at the daily pivot at the 7675 level and we also have the 30m 200ema just below this at 7670. As such the bulls will be keen to defend this area to start with. Below this and then a retest of Fridays low and the S1 level for today at 7650 would be quite likely. We also have the now green 2h coral here so that also lends a bit of weight to that support area.
Below that then the 7621 S2 and daily support level would be next and should this be seen then I would like to see a bounce here.
It's worth noting that the 10 day Raff channel has started to head downwards, probably as the FTSE100 has trod water for a few sessions now and that channel top is not that far away.
Should the bulls go for it today though to lock in a decent bull Monday and break above the 7720 resistance level then a push up towards the 7750 area and with R3 at 7757 we could see a stutter here. A mentioned previously the bulls ultimate aim is to get past the 7800 area though that still looks a big ask for the moment. Maybe the budget will spur it into life with a plethora of tax cuts and economy helping measures?! Errrrrrrr.... or not.
Likewise the S&P500 bulls will be keen to continue their push higher and with 5117 daily pivot as initial support I think they will try and defend this. There could well be some more upside in the USA today and the Raff channels continue to head up.
The Dax40 on the other hand has a bearish 2h chart with 17800 resistance and as such we may well see the bears hold a bit more sway on this today.
Good luck!
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Nice hold of 7621….. so far anyway