Technical analysis for FTSE 100 for 8th February 2024
The FTSE100 fell on Wednesday amid investor worries about supermarket group Sainsbury's big spending plans, while homebuilder Barratt slid after it agreed to buy smaller rival Redrow. In contrast to Wall Street, where a string of positive earnings lifted the S&P 500 to a record high, European stock markets mostly closed lower.
The blue-chip FTSE 100 fell 0.7%, while the mid-cap FTSE 250 index slipped 0.4%.
Data from mortgage lender Halifax showed British house prices reporting the strongest annual growth rate for a year in January, adding to tentative signs of momentum in the housing market.
Asian stocks were mixed Thursday as Chinese mainland equities rose in the final trading day before the Lunar New Year holidays. The S&P 500, meanwhile, closed at a fresh high. Chinese benchmarks climbed after the nation replaced the head of its securities regulator Wednesday, a surprise move that may foreshadow more forceful steps to support the stock market. However, weighing on the still fragile sentiment was China’s consumer prices that fell last month at the fastest pace since the global financial crisis as the country struggles to shake off persistent deflation pressures.
Chinese shares managed to hold onto weekly gains on Thursday as Beijing rolled out a slew of measures to revive market sentiment ahead of a week-long holiday, while the Nikkei vaulted to new heights after the Bank of Japan ruled out rapid rate hikes.
European markets are likely to open higher, with EUROSTOXX 50 futures up 0.1%. U.S. futures , were mostly flat.
In Asia, Japan's Nikkei surged 2.1% to close at its highest level in 34 years, helped by a 10% jump in SoftBank Group after key holding Arm forecast sales and profit exceeding the market's expectations.
On the rate front, a slew of Federal Reserve officials said they wanted to hold off on cutting interest rates until they had more confidence that inflation was headed to 2%, but that mostly echoed the recent message from Chair Jerome Powell.
Markets are still pricing in an 80% probability of a rate cut as early as May, with futures implying around 120 basis points of easing for all of 2024, down from 145 basis points late last week.
FTSE 100 technical analysis for today, 8th February 2024
The FTSE100 was a bit of laggard yesterday as it didn't follow the S&P500 up as that nearly managed the 5000 round number for the first time. It had a pretty bearish day in the end, falling from the 7700 area once again. That has set the 2h chart back to bearishness, with initial resistance from that at the 7656 level so that will be the level that the bulls will need to break today.
With the daily pivot also here then a rise to this initially and then some more bearish action to take it down to the 7606 daily support level again would make sense. We might also get a slight overshoot again and test that 7590 area as well. 7603 is also the key fob for today so I would like to see this area hold.
Having nearly tested the 5000 level but not had a massive drop off that I am expecting the bulls to continue their assault and push the S&P500 a bit higher yet. That may well help the FTSE100 regain some bullish composure today and another push up towards the 7700 level, if they break 7655.
If the bears were to break below 7590 today then the next key level to watch for is 7570 and we may well see a defence of this. The bulls will be keen to keep the daily chart bullish after all, and 7615 remains as the 25ema support.
On the upside, if they break 7660, then 7700 as mentioned (recent high of 7710) and above that then the 7535 level as resistance on the daily chart, with R2 at 7743.
So generally expecting a bit of a rise towards the 7655, a drop back then some more upside later. There isn't any major news out today and having fallen yesterday to retrace most of Tuesday's rise, we may well see the bulls gain some strength again today. Can the S&P500 break the 5000 convincingly today!?!
Good luck.
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