Technical analysis for FTSE 100 for 19th March 2024
Britain's FTSE indexes ended flat on Monday as investors stayed cautious ahead of week packed with economic data and a central bank policy decision, while roofing supplier Marshalls notched its worst day in 10 months on issuing a grim outlook.
The resource-heavy blue-chip FTSE 100 and the more domestically-focused mid-cap FTSE 250 both ended 0.1% lower.
In focus for investors this week are two domestic inflation prints for February, due on Wednesday, and the Bank of England's monetary policy decision on Thursday, when economists widely expect no change to interest rates. Global attention will also be on the U.S. Federal Reserve's rate verdict on Wednesday.
UK stocks have disappointed at the start of the year, with the main indexes down slightly, as fears of the domestic economy stagnating loom against the backdrop of uncertainty around the timing of interest rate cuts.
Asia
Japanese shares were volatile on Tuesday, while the yen fell to near 150 per dollar after the Bank of Japan in a widely expected move ended eight years of negative interest ratesand ushered in the nation's first policy tightening since 2007.
In a week filled with central bank meetings across the globe, the BOJ heralded a new era as it shifted awayfrom years of ultra-easy monetary policy.
The BOJ set the overnight call rate its new target and said it would guide it in a range of 0-0.1% by paying 0.1% interest on excess reserves financial institutions park with the central bank.
Analysts anticipate the yen to be more influenced by the Federal Reserve's policy decisions, including when and how much rate cuts are projected this year by the U.S. central bank. In addition, the BOJ pledged to maintain accommodative policy and traders expect rates to remain at zero for some time.
Australia's central bank held interest rates steady on Tuesday as expected, while watering down a tightening bias to just say that it was not ruling anything in or out on policy. While financial markets have priced in rate cuts for most other major central banks starting around June, the RBA is a notable outlier with no such mid-year pricing.
The Fed is widely expected to hold rates steady on Wednesday, with the market's attention on policymakers’ updated economic and interest rate projections and comments from Chair Jerome Powell.
FTSE 100 technical analysis for today, 19th March 2024
Disappointing effort from the bulls yesterday and a test of the 7700 level overnight once again. They now need to break above the 7725 area where we have the daily pivot for today, along with the 30m 200ema. The ASX200 was particularly bullish today, and it's bound to be pretty choppy based on the various central banks announcing rates. BoE will remain as is I expect, as will the Fed tomorrow. We have UK inflation out tomorrow as well.
So initial resistance from a cluster of them at the 7725-7728 area may well see a reaction if the bears are going to try for a bear Tuesday, and then above that we will eventually test the various 2hr resistance levels - 7740 for the Hull MA and then 7755 for the coral. 7741 is also the R1 level for today so that level should get a reaction if they break above 7728.
It's got a bit bunched up though the bias remains bullish as the Raff channels continue to head up, as does the S&P500 chart.
Above the 7755 level then the daily resistance level that we had for yesterday at 7786 is next up and would likely see a reaction.
On the support side of things, then the 7700 round number and the overnight low at 7692 are the first two levels to look out for, though a slide down to test the 7684 level would be quite likely if the bears do have a go today. We have S2 here, and also another test of the daily 25ema, also with 7680 being the bottom of the 10d Raff channel. As such I would like to see this level hold for a decent bounce as we head into the news cycle.
Not much more to say really, looks like we may well get a bit of a bearish overtone, though a possible bounce later on. Let's see if 7684 holds!
Good luck today.
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