Technical analysis for FTSE 100 for 27th August 2024
The UK's benchmark FTSE 100 edged higher on Friday as markets globally cheered U.S. Federal Reserve Chair Jerome Powell's nod to initiate rate cuts at the Jackson Hole economic symposium. UK Markets were closed yesterday however we are looking at a. positive open today with the futures price currently at 8367.
Optimism over looming U.S. interest rate cuts have been tempered by nervousness over what economic data will show in the coming weeks, sky-high expectations from earnings of AI darling Nvidia and evolving tensions in the Middle East.
That has left markets on edge and taking a breather, with the yen hovering near three-week highs, the dollar steady but close to 13-month lows and Asian stocks down 0.42% on Tuesday after touching its highest in a month on Monday.
Oil prices eased after surging in the previous session due to supply concerns, while gold was hovering close to a record peak touched last week on safe haven flows.
Futures indicate European stock markets are set for a subdued open as well, with London stocks returning from a holiday on Monday.
Investors await key economic data this week, including EU inflation on Friday, for signals on the policy path for the European Central Bank, which meets on Sept. 12, where traders have broadly priced in a 25 basis point rate cut.
Nvidia's earnings on Wednesday will set the tone for a potential AI rally and improved risk appetite now that markets are braced for rate cuts.
Asian markets
Asian shares snapped a three-day winning streak, led by tech stocks as investors focused on corporate earnings for fresh trading cues.
The MSCI Asia Pacific Index fell 0.4%, after rising over 11% from Aug. 5 through Monday. Benchmarks declined in most of the region, with those in Hong Kong, mainland China and South Korea all in the red. US futures were steady after some of the world’s largest tech names pushed the S&P 500 down.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.36% lower on Tuesday, inching away from the one-month high it touched in the previous session.
Japan's Nikkei eased 0.16%, while Chinese stocks were also on the back foot.
FTSE 100 technical analysis for today, 27th August 2024
We are bang on daily resistance at 8374 to start with this morning as I start this mail so we may well see an initial drop down from here. Futures have risen well overnight so some profit taking/bearish shorting may well play out to start with. However the bulls will be aiming to defend the rise and a push up towards the 8400 level which will be their plan.
8410 is the top of the 10d Raff channel, and both channels are now heading up with the daily chart still showing good supports at the 8261 ema and 8240 coral line. It remains buy the dip as per Fridays email.
For today the 8330 level is the green 30m coral, along with the daily pivot at the 8319 level so should we get an early dip down to this area I would like to see a bounce back up toward 8375, and then that 8410. We may well then see the bear Tuesday kick ion as the bears drive it back down.
The big news in the near term that everyone is looking for is the Nvidia results tomorrow, which should either help or hinder the tech sector and continue its AI boom.
Given yesterday was closed the resistance levels have all got bounced so we are already above R3 to start with, which may well help the bulls get their rise on. A rise and dip for today would therefore fit well, and they will be keen to get the 8400 headline going, after the drop earlier this month.
If they break 8410 then the next level to aim for is 8466.
Support wise, if 8320 breaks today then 8310 is the 2h coral now green, and then below that the daily supports mentioned above.
Good luck today.
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