Technical analysis for FTSE 100 for 17th November 2023
The FTSE 100 closed down 1.01pc to 7,410.97 Thursday.
Asian shares took a breather on Friday as a batch of softer U.S. economic data took some of the steam out of Wall Street, but also boosted bonds in a big way while slugging oil prices in a boon for the inflation outlook.
Asian stocks fell Friday as the escalating fight between the US and China for technological dominance triggered Alibaba Group Holding Ltd. to scrap the listing of its $11 billion cloud unit. Alibaba’s 10% slump, the biggest in a year, weighed on benchmarks of Hong Kong and the mainland as the company scuttled its planned cloud spinoff due to US restrictions on the export of chips. The broader MSCI Asia Pacific Index was down, but still on pace for a weekly gain of about 3%. Bonds climbed after data underscored a gradual deceleration in the US economy.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.67% from a two-month high, but still up 2.7% for the week.
Both Brent and U.S. crude slid almost 5% on Thursday to four-month lows in a move that was blamed on economic and supply concerns, though technical selling likely played a part when the $80 bulwark broke. Dealers suspected algorithmic and trend-following funds drove the speculative sell off with much of the losses coming in just a single hour of trade.
Sentiment in Asia had been supported by the apparent easing of tensions between the United States and China, with the Chinese press lauding the meeting between President Xi Jinping and President Joe Biden.
FTSE 100 technical analysis for today, 17th November 2023
Got quite bearish again yesterday with 7400 tested (and defended) once again. I am thinking that we see a bit more bullishness today though possibly some profit taking towards the end of the day.
A drop down to test the 7390 support level would fit quite well and we have daily support, S1 and the key fib all here. As such the bulls will be keen to defend this level. The FTSE100 was considerably more pessimistic than other markets yesterday, not helped by oil dropping off once again. The short term pump of the price by limiting supply is starting to wear off and we may well continue to see further downside on oil into year end.
The 2h chart has gone bearish after yesterdays declines, and has Hull MA resistance at the 7463 to start with today. 7478 is also R1.
Despite the drop yesterday and the shorter time frames being bearish, the daily chart remains bullish and both the Raff channels continue to head up. The daily 25ema on the Dax40 and S&P500 remain untouched still so there is still a potential for some more downside on them to then set up the bounce into year end. The levels of note are 15350 and 4370 respectively for the moment, but steadily rising as each day passes.
On the news front today at 10am we have Eurozone inflation, expected to show a drop to 4.2% in further signs of inflation easing across the board. If oil does continue to drop then that should also help. Chatter about rate cuts is also coming through at the moment, with Goldman Sachs saying they expect rate cuts from February, especially if the UK economy falls into recession. Meanwhile, the Bank of England warned borrowing costs would remain higher for longer.
Britain’s retailers suffered another weak month in October, official figures showed, in a sign that high interest rates are hurting the economy. Retail sales volumes fell by 0.3pc in the month to September, according to the Office for National Statistics (ONS). The drop was far more than analysts expectations of a 0.4pc gain and comes after retail sales were revised down for September to a drop of 1.1pc. Over the three-month period from August to October, sales volumes also fell by 1.1pc.
It comes amid hopes that the Bank of England might begin cutting interest rates early next year after separate data from the ONS showed the UK economy flatlined in the third quarter, while inflation fell in October to 4.6pc.
For today I am expecting any dips to be defended and a decent end to the week for the bulls. Below the 7390 level then 7350 is S2 and the bottom of the 10d Raff channel so should it get this low then a bounce here would make sense.
Above the 7463 level then look for a rise towards 7500 once again (or failing to break through from just below as we have the daily coral at 7489) and 7520 above this. That might be a big ask though considering its Friday.
Good luck today and have a great weekend.
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