Technical analysis for FTSE 100 for 7th December 2023
UK equities rose on Wednesday, tracking gains on Wall Street after labour market data spurred optimism about U.S. interest rate cuts next year, though British American Tobacco shares sank as it disclosed a big impairment charge.
U.S. stocks edged higher after data pointed to cooling labour market, prompting traders to price in rate cuts as soon as next March from the Federal Reserve.
However, Bank of England Governor Andrew Bailey said interest rates in Britain will need to stay at current levels for some time, adding that the outlook for inflation was uncertain.
Shares fell across Asia following declines on Wall Street, pressured by weak oil prices and concerns about China’s fiscal health. Treasuries slid after a rally as Japanese debt sold off. Equities were lower from Hong Kong to mainland China and Australia, following a third daily decline for the S&P 500. US futures were steady.
Asian shares fell with Wall Street on Thursday, while a sharp fall in oil prices to a six-month low and a soft reading on the U.S. labour market boosted the global bond market.
Overnight, Wall Street was dragged lower by energy stocks as oil prices slid and by tech shares. The Dow Jones slipped 0.2%, the S&P 500 lost 0.4%, and the Nasdaq Composite fell 0.6%.
Data overnight showed U.S. private payrolls increased less than expected in November in yet another sign that the American labour market is gradually cooling. Traders are turning their focus to the weekly jobless claims data later in the day, ahead of the non-farm payroll report due on Friday.
FTSE 100 technical analysis for today, 7th December 2023
That was a good bounce off the 7485 yesterday but the bears were slow to react at the 7535 level, at least initially. Overnight we have slid further off that though and are just below the key 7500 once again. The bulls will therefore need to be quick out the blocks today, and we could potentially see a modest climb to the 7510 level.
We have initial resistance here from the daily pivot and the 30m coral, along with a now bearish 2h chart with resistance from the Hull MA at 7515. As such, the bulls may struggle to break this especially as the short term momentum is bearish. The Nasdaq and S&P500 markets are both aiming for the 25ema on the daily at 15690 and 4500 respectively, which is also helping to pull the FTSE100 down with it. If those levels hold though then they should act as the springboard for the December rally.
Above the 7515 level then 7535 remains relevant once again, and a double with yesterday here (7542 to be exact) whilst R1 for today is also at 7534. Above this then I would expect to see the 7564 key fib and R2 area tested, and the bulls once again trying to aim for the 7615 level.
On the support side, the 7476 level is S1 to start with, and then the 7450 area below that once again - S2 is here, and just below the key fib at 7463. 7460 is also the recent low that we climbed from on Tuesday.
We also head towards NFP tomorrow and direction for rate cuts next year. Markets have priced in so much easing that they are clearly vulnerable to an upside payroll surprise.
Energy stocks are weighing on the FTSE100 as well as oil continues to slide.
So possibly on track for a dip and rise today. Good luck and keep an eye on those key levels!
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