Technical analysis for FTSE 100 for 27th September 2024
The FTSE 100 closed up on Thursday, though lagging its European peers as energy giants slipped tracking declining crude oil prices, which offset gains from China-exposed pockets of the market following Beijing's latest pledge for more policy measures.
The blue-chip FTSE 100 closed 0.2% up, underperforming peers on the continent. Europe's STOXX 600 and Germany's DAX ended more than 1% up.
Heavyweight energy shares eased 4.4% as crude oil prices dropped more than 2% on a media report that Saudi Arabia will give up its price target in preparation for raising output, and as OPEC+ looked set to raise output in December.
China will deploy "necessary fiscal spending" to meet an economic growth target of roughly 5%, leaders pledged, following a raft of aggressive central bank policy easing measures earlier in the week.
Domestically, a survey from the British Retail Consortium survey showed British consumers have grown more gloomy over the past month following the new Labour government's removal of a welfare benefit for pensioners and warning of tax rises at next month's budget.
Asia & Overnight
Chinese stocks raced toward their best week since 2008 and helped lift Asian shares to 2-1/2-year highs after Beijing rolled out a huge stimulus package to revive the economy, while a sharp fall in oil prices bodes well for disinflation globally.
The Japanese yen fell 1% to three-week lows as markets bet Sanae Takaichi, the economic security minister who opposed interest rate hikes, could win the leadership contest of Japan's ruling Liberal Democratic Party on Friday.
European sharemarkets are set to open slightly higher, with EUROSTOXX 50 futures adding 0.2% and FTSE futures up 0.1%. Wall Street futures were largely flat.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5%, having hit its highest level since February 2022 earlier in the day. It was headed for a weekly gain of 5.3%, thanks to a huge turnaround in Chinese shares.
China's blue chips jumped 3.5%, bringing the weekly rise to 14.6%, the most since November 2008. Hong Kong's Hang Seng index also gained 1.9% and was up 11.2% for the week, its best performance since 2009.
Treasury yields were steady in Asia, having risen overnight on low U.S. weekly jobless claims that led markets to lower the odds of another outsized half point rate cut from the Fed in November to 51%, from 57% a day earlier.
Investors are waiting for the core personal consumption expenditures (PCE) price index - the Fed's preferred measure of inflation - later in the day. Forecasts are centred around a small monthly rise of 0.2%, as markets are split on the size of an expected Federal Reserve rate cut in November.
FTSE 100 technical analysis for today, 27th September 2024
We are still hovering at the 8300 area and the main levels in play for today at 8250 support and 8345 resistance. We may well just stay between these today, with a rise and dip playing out. The ASX200 was weaker so we may follow suit and with oil dropping a bit that will weigh on the FTSE100. It's also Friday so likely to be slightly odd, and profit taking ahead of the weekend is distinctly possible.
We also have initial support from the 30m 200ema at the 8278 level so the bulls will certainly be keen to defend any early drops to this area, as it also ties in with the bullish 2h chart and support from the Hull MA 8278. The green 2h coral which held well yesterday for our long, is at 8270 now as well.
Should the bulls break above the 8345 level then 8396 R3 and 8393 the top of the 20d Raff channel loom into view. Talking of Raffs, the 10 day channel top is at 8350 as well to give this resistance area a bit more significance.
On the bearish side, a break of the 8250 level is likely to see 8220 again, and with S3 at 8187 aligning with the recent low we should see that hold if it got that low. I am not expecting it to test that area though!
On the news front we have, at 1330, the USA PCE which is the the Fed's preferred measure of inflation. Forecasts are centred around a small monthly rise of 0.2%, as markets are split on the size of an expected Federal Reserve rate cut in November.
Will leave it there in order to get this sent out. Have a great weekend!
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