Technical analysis for FTSE 100 for 12th April 2024
The UK's FTSE 100 edged lower on Thursday as investors awaited Britain's economic figures for hints on the path of domestic monetary policy after the European Central Bank (ECB) signalled it may soon start to cut rates. The blue-chip FTSE 100 closed down 0.5%.
British banking and insurance stocks fell the most, echoing a weak mood among European financial stocks after the ECB held rates at a record high as expected but pointed to rate cuts commencing soon.
The UK banks index fell 2.7%, recording its biggest percentage drop in almost two months.
Global equity markets have been choppy this week as investors pondered the outlook for global rates after hotter-than-expected U.S. inflation data tempered expectations the Federal Reserve would cut rates several times this year.
Eyes will be on Friday's UK GDP figures as well as inflation and labour market data that could shape expectations around when the Bank of England (BoE) will start cutting rates.
Traders are currently pricing interest rate cuts of 43 basis points from the BoE by the end of 2024, and see the first cut coming in August.
ASIA
Asian equities were in a subdued mood on Friday as investors pondered the path for Federal Reserve interest rate cuts amid a murky U.S. inflation outlook.
Gold rose to a fresh all-time peak after a mild reading for producer price inflation kept alive hopes for Fed easing this year, though U.S. Treasury yields stuck close to five-month highs in the wake of hotter-than-expected consumer price data mid-week that forced a paring back of rate cut bets.
The dollar hung near a five-month high following a nearly 1% gain this week against a basket of major peers.
Crude oil continued to trade north of the $90 mark amid a flare-up in Middle East tensions.
Markets now expect fewer than two quarter point reductions to the Fed funds rate this year, below the three cuts Fed officials had pencilled in last month, after rushing to trim easing bets following Wednesday's CPI shock.
Fed officials said on Thursday there was no urgency to ease, with Boston Fed President Susan Collins saying the strength of the economy and uneven retreat in inflation argued against a near-term push to lower rates.
FTSE 100 technical analysis for today, 12th April 2024
The main event is that UK GDP has just come in as forecast at 0.1% for February. That should help the bulls a little bit today and a possible push up towards the 7990 initial resistance level. We have R1 and the key fib here, as well as a bearish 2h chart (resistance though at 7959 to start with on that) and as such may well see the bears have a go here. As per yesterday though the bulls will be keen to target the 8000 level and put in a strong end to the week.
Above 7990 the 8033 level is next up and should we get that high today I can see some profit taking here ahead of the weekend, as well as a few bears appearing. The S&P500 bounced well yesterday from the 5140 level and will be looking to close the week above the 5200 level. That may well help the FTSE100 bulls as well.
Support wise the key support first up is the daily pivot and now green 30m coral, both at the 7938 level, so should there be an initial test off this area we should see a bounce here.
Below this then the bears will be looking to 7876 where we have the key fib, and also just below yesterdays low at 7887 - which also aligns with the S1 level at 7896. That said, to start with the 30m chart is bullish so we should see the bulls at least attempt to keep control and defend the 7940 area.
The daily candles this week have mostly had small bodies and long wicks and tails which suggests a bit of uncertainty - it has been a bit of an odd week for the FTSE100, lacking any clear direction. The 10d Raff channel is levelling off a bit now though whilst the 20d Raff channel remains heading up. The bias is still buying the dips.
So, keep an eye on the key levels, have a good day today and a great weekend.
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