Technical analysis for FTSE 100 for 27th October 2023
The FTSE 100 closed 0.81pc lower at 7,354.57, while the FTSE 250 midcap index finished down 0.52pc at 16,783.09. The blue-chip index was weighed down by Standard Chartered, which sank to the bottom of the FTSE 100 after revealing a 33pc drop in pre-tax profit during the third quarter.
The US economy grew at its fastest pace in almost two years in the quarter to September amid a boom in consumer spending. The economy expanded by 4.9pc on an annualised basis in the third quarter against expectations of 4.5pc growth. This is a jump from 2.1pc in the second quarter and the strongest expansion since the fourth quarter of 2021 when the economy was rebounding from lockdown. The figures highlight the resilience of households and businesses despite a rapid increase in interest rates.
Asian shares tracked Wall Street futures higher on Friday as Amazon provided some welcome earnings relief, while bonds were able to sustain a rally amid signs U.S. inflation was easing.
All eyes were on U.S. data later in the session that may show core inflation growing 0.3% in September on a monthly basis, pushing the annual rate lower to 3.7% from 3.9% a month ago.
FTSE 100 technical analysis for today, 27th October 2023
We finally got the second test of the 7330 support level but after the bell, and it's held well to see a steady rise so far. That lends weight to the case for a bit of optimism for today, and we may well see a push towards the 7415 level. The bears did well driving the market down from the 7395 resistance first thing yesterday, but that hold of the 2h support bodes well for the bulls, along with setting up a decent double bottom test.
So for today I am thinking that we will get an initial kick up towards the 7395 level once again and a test of the 200ema and R1 level here. I am also expecting the 30m coral to shortly go green and lock in support at the 7350 level on that so will be interesting to see if that pans out.
If it does hold as support, then a rise towards the 7415 level and the daily resistance would fit well.
Despite this bullish sentiment for today the daily chart is still bearish and the 25ema has now dropped down to the 7490 area. As such we need to keep an eye on this level as we may well see the bears strike here as well.
We also have the R2 and top of the 10d Raff channel at 7433... so should we spike above the 7415 level then this would be a likely area to get the reaction.
Below the 7350 level then the bears would be aiming for that 7320 area again, and being the third test would likely break. That would then see a slide down to the 7304 key fib, but ultimately the 7260 area for the lower daily support. Even lower, and I am not expecting this today, the 7225 is the bottom of the 20d Raff channel and below the S3 level of 7245.
The S&P tumbled further yesterday and tested the 4130 level though has bounced back a bit since. The bottom of the 20d Raff channel coincides with the S1 and key fib area at the 4122 level so the bulls will be keen to defend any test of that today. As I write the price is just trying to break above the 2h Hull MA resistance at the 4155 level so if the bulls are quick out the blocks today we may well start to see that gain some strength.
We have US data out later that may show core inflation growing 0.3% in September putting the annual rate lower at 3.7% from 3.9% a month ago. If that is the case we may well see that help the bulls.
Good luck today and have a great weekend.
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