Technical analysis for FTSE 100 for 11th July 2024
London stocks closed higher on Wednesday thanks to a boost from precious metal miners, while hawkish comments by Bank of England Chief Economist Huw Pill eased bets on an interest rate cut in August.
The blue-chip FTSE 100 index closed 0.7% higher, after logging its worst day in nearly a month on Tuesday.
Also capping gains for the dollar earners was a rise in the pound as BoE's Pill focused on strong price pressures in the economy and said the timing of a first interest rate cut was an "open question," addressing a think tank in London.
Investors are now expecting roughly a 50% chance of an initial rate cut in August, down from 62% before Pill's speech. The yield on Britain's two-year gilt hit a session high of 4.125% post the speech.
On Monday, outgoing BoE Monetary Policy Committee member Jonathan Haskel said he was not yet ready to vote for rate cuts. Catherine Mann, another external MPC member, is due to speak at 1630 GMT.
Investors are also looking to Britain's GDP numbers due on Thursday.
The domestically-focused FTSE 250 index jumped 1.4%, led by SSP Group's 10.4% rise after the restaurant operator stuck to its fiscal year forecasts.
Asia & Overnight
Stocks rose on Thursday, with markets from Tokyo to New York at record highs, while traders counted down to U.S. data that is expected to show inflation easing and pave the way for rate cuts in September.
Bonds and the dollar were steady, keeping the yen on the weak side of 161 per dollar and near its lowest levels in decades.
Gains in heavyweight technology shares sent the S&P 500 up 1% overnight to a sixth consecutive record closing high, and in Asia, Japan's Nikkei rose 1% to a record high at 42,426.
MSCI's broadest index of Asia-Pacific shares outside Japan also gained 1% to a two-year high. Taiwan stocks hit a record peak and Australia's ASX 200 was within a whisker of its all-time top.
U.S. Federal Reserve Chair Jerome Powell told lawmakers on Capitol Hill overnight that "more good data" would build the case for the U.S. central bank to cut interest rates. Futures pricing implies about a 75% chance of a cut in September.
Economists forecast annual U.S. CPI slowed to 3.1% in June from 3.3% in May.
China stocks chimed with the market momentum on Thursday, but a drumbeat of disappointing data and talk of tariffs in its major export markets have made rallies hard to sustain. China GDP print is due on Monday.
In commodity trade, oil prices edged higher on signals of strong U.S. gasoline demand. Brent futures rose 35 cents, or 0.4%, to $85.43 a barrel. U.S. crude climbed 36 cents, or 0.5%, to $82.47 a barrel.
Record high
The S&P 500 topped 5,600 for the first time. A renewed bid for megacaps drove the benchmark to its longest rally since November. The index climbed 1% — up for a seventh straight day — notching its 37th record this year. Treasuries remained fairly stable after a strong $39 billion sale of 10-year bonds. As Wall Street geared up for the consumer-price index Thursday, Federal Reserve Chair Jerome Powell said he doesn’t need inflation below 2% before cutting rates. He added the labor market has cooled “pretty significantly.” Swaps are pricing in two rate cuts in 2024 and higher chances the first comes in September. The so-called core CPI, which excludes food and energy costs, is expected to have risen 0.2% for a second month in June. That would mark the smallest back-to-back gains since August — a pace considered more palatable for Fed officials.
FTSE 100 technical analysis for today, 11th July 2024
Well the landscape is all looking quite positive for a bit more upside and we may finally see a test of the 8265 resistance area today that flagged up last week. We have just had GDP data out which shows a slight uptick on the forecasts at 0.4% month on month. That may well help the bulls to pull away once again from the 8200 level, but we have decent support to start with just below at the 8190 area.
The green 30m coral, daily pivot and Hull MA on the 2h are all showing around this area so should we get an initial drop down to here then a bounce would make sense and fit the charts well for a push up towards the 8232 initially where we have R1.
Below the 8186 daily pivot level then the bears will be aiming for the recent low at 8130, and we have the key fib at 8135 here also.
However, working in the bulls favour is the fact that the 10d Raff channel is now heading up, and following the climb yesterday from 8140 we have a bullish 2h chart. As such I would like to see some more upside today and a bullish overtone.
Above the 8265 level then ultimately we are looking at 8304 R3 above that and the next round number looms into view. The top of the 10d Raff channel is also here at 8300, while the 20d is at 8311. Whilst I dont expect it to get that high, if it were to do so then a short here is worth a go. Higher up the daily coral is at 8333.
On the news front later we have the US inflation rate at 13:30 which is liable to create some volatility. The forecast though is a print of 3.4% again for the core, and a slight drop to 3.1% YoY. A slowing headline CPI but a steady core CPI.
Good luck today.
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