Technical analysis for FTSE 100 for 10th October 2024
British equities mostly rebounded on Wednesday, with the biggest boost from the real estate sector, while homebuilders extended declines from the previous session after brokerages cut Vistry's target price.
The blue-chip FTSE 100 index climbed 0.7% to clock its best day in nearly three weeks, while the mid-cap FTSE 250 was up 0.9%. The benchmark index notched its biggest single-day percentage drop in two months on Tuesday.
Investors will now shift their focus to the minutes of the U.S. Federal Reserve's last monetary policy meeting to gauge the size and extent of further interest-rate cuts in the world's largest economy. Back home, GDP data for August at the end of the week will also be on markets' radar.
Asia & Overnight
Asian stocks got a lift on Thursday from Chinese stocks as China's central bank kicked off its 500 billion yuan facility to spur capital markets, while the dollar lingered near a two-month high ahead of U.S. inflation data later in the day.
Chinese stocks were back at it and surging on Thursday, shaking off the previous day's slump, with the focus on a Saturday press briefing that investors hope will shed more light on fiscal stimulus measures aimed at reviving China's economy.
European stocks might get a breather - especially China-related miners and luxury names that have taken a beating as scepticism around Chinese stimulus gains ground. Futures indicate European bourses are due for a slightly higher open.
Over in the Far East, investor sentiment got a shot in the arm early on Thursday as the People's Bank of China kicked off a 500 billion yuan facility to spur capital markets which nevertheless were volatile and jittery.
The blue-chip index was last up 3.5% after sliding 7% on Wednesday, its biggest one-day drop since the pandemic as investors looked for details around the stimulus and awaited fiscal moves to spur growth.
Hong Kong's Hang Seng was up 4% and in the space of two weeks has surged to be second best-performing major stock market in Asia this year with a gain of 25%, much of which has come since the stimulus was announced on Sept. 24.
All eyes though will be on a finance ministry press conference on Saturday that could reveal plans on fiscal stimulus.
In many ways, this is it, this is the moment markets and investors have been waiting for, especially after the central bank and other regulators in late September announced the most aggressive monetary stimulus measures since COVID-19 and steps to revive the debt-ridden property market.
Watching CPI
Wall Street traders gearing up for key US inflation data pushed the S&P 500 to a new all-time high, with big tech stocks once again leading the charge. Treasury yields also moved higher, while the Bloomberg dollarindex notched its eighth-straight day of gains on Wednesday. The US consumer-price index due out Thursday is tipped to show year-on-year inflation slowed to 2.3% in September from 2.5% a month earlier, according to a Bloomberg survey of economists. The report has potential to sway investor views on how much easing the Federal Reserve will do after last week’s blockbuster monthly jobs report prompted a pullback in market bets on supersized interest-rate reductions. Meanwhile, the newly released minutes of the Fed’s last policy meeting showed that Chair Jerome Powell received some pushback on the half-point interest-rate cut that was implemented in September, with some officials preferring a smaller, quarter-point cut.
FTSE 100 technical analysis for today, 10th October 2024
A decent hold of the 8200 level yesterday for the FTSE100, along with the Dax40 holding the Hull MA at 19015, saw the bulls return to the fray with some vigour. That should continue into today but we now move into the news cycle with US CPI the main market mover for today at 1330. We may well see a bit of profit taking ahead of that today given the rise yesterday on the S&P500.
Initial support is at the daily pivot at the 8246 level to start with today, and then the 2h Hull MA at 8232 below that. As such I would like to see the bulls defend this as that keeps alive the chance of a rise to retest the 8330 level again.
Below the 8232 level then 8200 to 8180 is the support zone, with a break of that looking for a drop down to the 8120 area. I don't think we will get that low today and am more inclined to have a bullish bias today.
On the resistance side of things, 8300 is the R1 and key fib line, and as such we could see an early stutter here - once again a decent 100 point profit point from the 8200 longs yesterday. Above that the 8330 area is R2 and the top of the 10d Raff channel as well as the recent high so a likely area for the bears to pounce. Higher still and the 8367 remains as daily resistance on the longer time frame, though I don't think we will see that today.
On the CPI news front at 1330, the core CPI is forecasted to have dropped a smidge to 0.2% from 0.3% though we may well get a bit choppy around that time. There may also be a bit of relief in the US that the hurricane hasn't been quite as bad as was predicted (still major though!). More UK centric data tomorrow at 7am being the GDP data will have more of a bearing on the FTSE100 and likely lead to a freaky Friday!
So, few key levels in play today to keep an eye on. Good luck....
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