Technical analysis for FTSE 100 for 13th March 2024
The FTSE 100 jumped to its highest level since May as investors cheered the prospect of earlier interest rate cuts. Britain’s blue-chip index rose 1pc on Tuesday to close just shy of 7,750 points after jobs market data showed a fall in vacancies and a slowdown in wage growth. The latest data is likely to embolden Bank of England policymakers as they debate when to bring interest rates down from their 16-year high of 5.25pc.
The FTSE 100 jumped 1% on Tuesday as pound and bond yields slipped after slowing domestic wage growth boosted hopes that the Bank of England may begin monetary policy easing this year.
The blue-chip FTSE 100 rose 1.0%, logging its best day in nearly a month and closing at its highest level since May 2023.
Data showed British wages excluding bonuses grew at their slowest pace since October 2022 during the three months to the end of January, while the unemployment rate edged up unexpectedly.
Meanwhile, U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting some stickiness in inflation that could delay an anticipated June interest rate cut from the Federal Reserve. Money markets are now pricing in around 72 basis points (bps) of rate cut from the BoE, up from around 67 bps a day earlier.
Asia
Asian shares notched seven month highs on Wednesday, on the back of record peaks on Wall Street, as investors mostly shrugged off slightly hotter-than-expected U.S. inflation, betting it won't derail interest rate cuts expected by the middle of the year.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2% to its highest level since early August. The Hang Seng advanced 0.4% to 3-1/2 month highs. Tokyo's Nikkei was steady and focus in Japan is on springtime wage negotiations underway this week, with pay hikes seen encouraging an exit from negative interest rates perhaps as early as next week.
Overnight data showed U.S. consumer prices increased a solid 0.36% in February against expectations for a 0.3% rise, amid higher costs for fuel and shelter, though on an annual basis core CPI slowed slightly to 3.8%
FTSE 100 technical analysis for today, 13th March 2024
The bulls are back in the driving seat and 7800 remains on the cards and in fact we have the key fib resistance just below that at 7795. As such we could see a rise falter here and some profit taking again. Initial support is at the daily pivot at the 7740 level and it would be good to see that hold to build on the strength for a rise this morning.
The FTSE100 is certainly choppy at the moment but the US markets continuing to push on upwards are helping it to move slowly north. We have just had the GDP data out and it has remained at -0.1% for the 3m average, while YoY to Jan was -0.3%. Focus will shift back to interest rate cuts to stimulate some growth, however on the flip side January saw a rise to 0.2%. The technical recession was short lived! The figures will give a boost to PM Rishi Sunak who pledged to get the economy growing again.
If the bears break below the daily pivot level then a slide down to test the 30m 200ema at 7702 may materialise, though we have S1 at 7716 just prior to that. The 2h chart is pretty bullish since the bounce from 7610, and has decent support from the Hull MA at 7725.
The daily Raff channels are both now heading up and the top of the 10d Raff is at the 7822 level. Might be a big ask for today but generally looks like we will get a rise the morning.
Above the 7795 level then that 7822 is the next main level to look out for. Above that then 7854 is R3 for today though that might be a bit of a big ask!
The S&P500 and Dax40 also look positive for today and buying the dip looks to be the best play for a rise towards the resistance levels at 5201 and 18058 respectively.
Good luck today.
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