Technical analysis for FTSE 100 for 11th October 2023
Stock markets surged on a day of action on trading floors triggered by the bloodshed in the Middle East, falling bond yields and reports of Chinese stimulus. The FTSE 100 ended the day 1.8pc higher, while the continent-wide Stoxx Europe 600 closed up 2pc, in its strongest performance since November 2022. Equities gained in the early part of the day amid a fall in US Treasuries, as investors flocked to the safe-haven assets in light of the Gaza conflict.
Treasuries were also sent falling by comments from Fed officials indicating that interest rates have likely peaked. Stocks were buoyed in the afternoon after Bloomberg reported that China is preparing to unleash a new round of measures to support its economy.
Asia’s stockmarkets rose on Wednesday and the dollar beat a retreat as a dovish shift in tone from Federal Reserve officials had traders paring U.S. interest rate expectations, though with a wary eye on U.S. inflation data due on Thursday.
The S&P 500 gained overnight and MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3% to a two-week high in morning trade. Japan’s Nikkei rose 0.5%.
FTSE 100 technical analysis for today, 11th October 2023
Bit unlucky with the shorts yesterday as the bulls managed to continue their push higher and a break of the 7565 did ultimately lead to the R3 level at 7625. It stalled there since ahead of CPI data out at 1330 today, so we may well see a rise and dip play out today - buy the rumour, sell the news.
initially it looks like we may well see a bit more upside, towards the 7685 area to test the top of the 20d Raff channel at some point today. However, we are also near the top of the 10d Raff channel top at 7650 so could also see an early reaction here.
The ASX200 had a dip and rise, albeit a small dip, and with the 2h Hull MA at 7570ish then we could see a similar pattern and this area hold. The bulls will be keen to defend the 7600 level as they did with 7500. Also bear in mind that October seasonality which has a bullish start then a drop back (likely towards that 7400 level).
Below the 7575 level then there are a cluster of supports at the 7545 with S1, key fib and the 30m 200ema here. Should it get this low then it would be worth a long here.
Above the 7685 level then 7716 is R2, though to add 100 points today from where we are at the open might need some spectacular data!
It's also worth noting that the bearish EMAs on the FTSE100 daily chart weren't in that state for very long and are now bullish, with the 7549 25ema now locked in as support.
The S&P500 is building on its strength as well, and will be looking to break above the 20d Raff channel top today at 4375. That would open up the 4400 level, and also the top of the 10d Raff at 4420. 4412 for R2 as well. Its just broken above the 25ema resistance on the daily chart at 4352 as well, so possibly a bit more pumping to come on that one too....
The Dax40 is also at the top of its 20d Raff channel, so again a drop and rise would make sense on this, though again, the bulls will be looking to break out above.
Good luck today and don't forget the CPI news at 1330, with a drop to 0.3% forecasted. We also have the Fed minutes at 7pm.
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