Technical analysis for FTSE 100 for 4th September 2023
Asian shares pushed higher on Monday as markets wagered the Federal Reserve was done raising U.S. interest rates, and on hopes the drip feed of policy stimulus from Beijing would be enough to stabilise the Chinese economy.
A holiday in the United States made for thin trading ahead of key readings on U.S. services and Chinese trade and inflation later in the week. More policy action is also expected from Beijing, including relaxing restrictions on home buying.
MSCI's broadest index of Asia-Pacific shares outside Japan added 1.0%, having climbed 2.3% last week. Japan's Nikkei rose 0.5%, after rallying 3.4% last week. The broader Topix umped 3.7% last week to its highest in 33 years, helped by data showing companies made record profits in the June quarter.
S&P 500 futures and Nasdaq futures were both little changed early on Monday. EUROSTOXX 50 futures added 0.3% and FTSE futures rose 0.4%.
Non Farm Payrolls
Stocks had firmed on Friday after a benign August U.S. payrolls report hardened expectations for an end to rate hikes.
While the headline jobs number topped forecasts, downward revisions to the previous two months and a dip in wage growth pointed to a loosening in the labour market.
The jobless rate also jumped as more people went looking for work, leaving the vacancies to unemployed ratio at its lowest since September 2021.
FTSE 100 technical analysis for today, 4th September 2023
News flow has turned a bit more bullish and the "proper" traders are now back from their Summer sojourn so we may well see some more strength materialise this month, at least for the first half as the China stimulus news etc filters through. Maybe a pause on rate rises as well just to give it a bit more of a push in the next couple of weeks.
Initially today we have 7531 as resistance with R1 here and just above the 7526 daily resistance level. The 2h chart is just starting to go bullish after the rise on Friday, and we may well see the Hull moving average lock in as support today with the 7500 level becoming the new support.
Above the 7531 level then ultimately, and this may well play out today, I am looking for the 7575 resistance area to be tested and then we may well see the bears have a go here. That's also just above R3 for today. A rise to that today to then set up a bear Tuesday would actually work pretty well but maybe that's too predictable!?
7550 is also the daily 200ema and the top of the 20d Raff channel so any overshoot of this may well then see a drop back.
Support wise, 7500 as mentioned, and then the 7480 30m coral is just below that. The bulls will I expect be keen to try and hold onto this 7500 level and push higher though.
Lower down, then 7460 is the 30m 200ema, though a break of this would upset the bulls mojo and a slide down towards 7410 would likely occur.
Generally then today it looks like we may well see a bit of a Bull Monday once again, and a rise to test the 7575 level is what I am looking for.
Good luck today.
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