Technical analysis for FTSE 100 for 23rd October 2023
Asian shares hit one-year lows Monday as the risk of a wider conflict in the Middle East clouded sentiment in a week laden with data on U.S. growth and inflation as well as earnings from some of the world’s largest tech companies.
Gold and crude oil fell with Treasuries while US equity futures rose as fears softened over the weekend that the conflict in the Middle East would escalate. Asian stocks fell for a fourth day, with China one of the worst hit as investor sentiment remains fragile.
Oil slipped below $87 a barrel, while gold fell from a five-month high to around $1,970 an ounce as Israel held off on its ground offensive into Gaza amid efforts to secure the release of more hostages. US futures contracts advanced in Asia after the S&P 500 slid more than 1% Friday. Treasuries fell, paring Friday’s rally. The yen briefly weakened past 150 to the dollar.
Bonds were also under pressure as U.S. 10-year Treasury yields crept to within a whisker of 5.0%, pushing borrowing costs up across the globe and testing equity valuations.
Washington warned over the weekend of a significant risk to U.S. interests in the Middle East as ally Israel pounded Gaza and clashes on its border with Lebanon intensified.
The European Central Bank and Bank of Canada also hold policy meetings and, while no hikes are expected, investors will be sensitive to guidance on futures moves.
FTSE 100 technical analysis for today, 23rd October 2023
The bears managed to drive it down to the 7372 support level last thing on Friday and as such we have now got a gap there for today as we are opening back around the 7410 area. Today looks like it might well tread water a bit and we have initial resistance at the 7450 level with the R1 and Hull MA resistance levels here.
An early rise to this level would fit well before the bears have another go and try and break 7400 once again, and probably try and make it stick this time. Geopolitical tensions continue unabated for the time being as well, with unrest throughout Europe in term of protests/rallies etc.
Initial support is at that 7372 level as mentioned with daily support here, and then below that the 7331 S1 level would be next up.
Not sure that we will get that low today (Bull Monday? or certainly an attempt at it) and we also have the bottom of the 20d Raff channel at 7358 in play. The 10 day Raff channel has now started to head downwards though as you would expect, with the bottom of that at 7315.
I expect the bulls will be fighting tooth and nail today to try and keep the price above the 7400 level. That said, with the recent declines (and the seasonality playing out perfectly with a rise and dip over October) the daily EMAs are bearish once again with the 7540 level as 25ema resistance. Should we see this level then a drop down from here would fit the bill pretty well. We also have the daily 200ema there as well, giving it more weight. Defineily keep an eye out for a test of this price area.
Good luck today.
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