Technical analysis for FTSE 100 for 4th October 2023
Stock markets across the world have fallen as US government borrowing costs soared to a 16-year high. The benchmark 10-year Treasury yield surged to its highest level since 2007 after new data showed that the US labour market remains overheated.
The number of US job openings increased from 8.9m in July to 9.6m in August, the US Labour Department said on Tuesday. It is the latest sign of a resilient US economy, fuelling concerns that the Federal Reserve will have to keep interest rates higher for longer.
Asian stocks sank to 11-month lows on Wednesday as an ongoing rout in global bond markets saw U.S. yields reach 16-year highs, challenging equity valuations and souring appetite for risk assets in general.
The spike in Treasury yields lifted the dollar to new heights with only the yen showing some fight amid speculation the Japanese authorities might be intervening behind the scenes.
Stronger-than-expected U.S. job openings data, meanwhile, sent the 10-year yield up nearly a dozen basis points (bps) on Tuesday and it rose a further three bps in Asia to 4.838%, the highest since 2007.
FTSE 100 technical analysis for today, 4th October 2023
We got the full range play out yesterday from 7550 to 7450 and the latter has held overnight. As such we could see an initial kick up towards the daily pivot at 7492 whereupon the bears may well reappear. The negative sentiment abounds at the moment and the US markets continue to slide as more and more fear grips investors. Be time to buy soon!
Generally it still looks pretty negative for the FTSE100 at the moment so shorting the rallies still looks the preferred play, though we are just on the bottom of the 20d Raff channel at 7440 as I write this. That said given the decline from 7750 the daily EMAs are just going bearish and we have resistance from them at 7550 locking in now. The bulls will need to break above that level to reverse the declines.
The 2h chart is also bearish with 7500 being the Hull MA resistance so ties in with the daily pivot also being resistance to start with. I wouldn't be surprised if today's range is 7400 to 7500.
S1 to start with is at 7440 and we also have the key fib here, though if the bears break this then a slide down to the 7403 S2 level will likely play out. Then we are also just above the daily support level of 7392, so I would like to see a bounce around here to at least back test the 7450 level.
Above the daily pivot then 7540 has the key fib and the 30m 200ema and would be the next level of note. I can't see the bulls breaking above this too easily today or actually anytime soon with out help, so a bit more downside first would probably materialise.
The US markets do seem to be pulling everything down at the moment along as higher borrowing costs spook investors along with the higher treasury yields.
Good luck today.
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