Technical analysis for FTSE 100 for 12th June 2024
London's FTSE 100 fell 1% on Tuesday, weighed down by financial stocks tracking broder losses in European markets as political uncertainty spooked investors and weakness in industrial miners further weighed on the market.
The benchmark FTSE 100 index's decline marked its worst day in nearly two months while the mid-cap FTSE 250 index slipped 0.9% after touching its lowest in over a month.
Industrial miners recorded their worst day in over a month, declining 1.9%. They fell in tandem with copper prices that hit a seven-week low on a stronger dollar, rising inventories and weak indicators in China.
Data showed that the British unemployment rate rose to 4.4% in April from 4.3%.
Focus is now on a key inflation reading in the United States on Wednesday, followed by the Federal Reserve's next decision on interest rate cuts.
Asia & Overnight
Asian shares were subdued on Wednesday after data showed China's consumer prices still remained soft, while the dollar held firm ahead of a key U.S. inflation report and Federal Reserve policy decision that would set the near-term course for interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.1%, while Japan's Nikkei slid 0.8%. Technology shares in the region, however, outperformed, with MSCI Asia-Pacific ex-Japan IT index up 1%.
Data showed that China's consumer price index fell 0.1% in May from a month earlier, missing forecasts. On an annual basis, they rose 0.3%.
Overnight on Wall Street, Apple surged 7% to a record high a day after it unveiled new AI features meant to rekindle demand for iPhones. That helped Nasdaq Composite rise 0.9% and the S&P 500 gain 0.3% to record closing highs.
This also lifted tech-heavy Taiwan and South Korean shares, gaining 0.7% and 0.3%, respectively.
Elsewhere, caution reigned as focus turns to the U.S. CPI data later in the day, which is forecast to rise a slim 0.1% in May from a month earlier, but with the core up 0.3%.
S&P 500 futures and Nasdaq futures both were flat in Asian trading.
Hours after the release of the U.S. CPI data, the Fed is considered certain to hold steady at its policy meeting, but the focus is on whether it keeps three rate cuts in its "dot plot" projections for this year. Futures imply 39 basis points of Fed easing for this year, equivalent to just one and a half cuts.
Oil prices extended gains for a third straight session. Brent futures rose 0.2% to $83.11 a barrel. U.S. crude futures gained 0.4 to $78.19 a barrel.
Wall Street warning
While the S&P 500 eked out another record-high close on Monday, banks from JPMorgan to Citigroup say investors should prepare for large swings in equity markets ahead of the latest inflation data and Federal Reserve policy decision — both of which are due on Wednesday. The options market is betting the US benchmark will move 1.3% to 1.4% in either direction by Friday, according to JPMorgan’s Andrew Tyler. That comes amid expectations for US core consumer prices to have moderated in May to the slowest pace in three years, on an annual basis.
FTSE 100 technical analysis for today, 12th June 2024
Well the bears certainly appeared at the 8250 area yesterday despite the attempt to push past, and we ended up getting to the lowest support at 8114 after all. Didn't expect it to get quite that bearish but Bear Tuesday living up to its name. The bulls though have brought it back up well from there, and initially today we may well see a push up a bit higher towards the 8240 R1 level.
That said we also have 8190 as resistance from the Hull MA on the 2h to start with so that will be the first hurdle for any rise to break.
The daily chart is now locked in as bearish with the 8250 level once again resistance as the 25ema is here, so with yesterdays high here too then this area is the ultimate resistance for today that would need to break. Keep an eye on 8190 and 8240 though.
The US markets are certainly more positive than the FTSE100, and are helping to underpin the strength going into today. UK GDP has just come in as forecast. GDP was flat (0.0% growth) in April 2024 and grew 0.7% in the three months to April.
Support wise then the 30m chart is bullish and has 8167 as the EMA support, but a possible test of yesterday's low and the key fib at 8110 could well play out, especially if the bears drive it down off that 8190. There is however the 30m coral in play which looks like it may turn green (support) shortly and that is 8151 so a possible early bounce off this today.
The more major news out later in the US is the eagerly watched inflation data as well and the FED rate decision. Inflation is out at 1330, while the rate news is at 1900. No changes expected just yet, remaining at 5.5%. The press conference at 1930 may well create some movement though, especially if inflation is being stubborn. Future rate guidance etc etc
So generally expecting a rise, dip, rise today and keeping a close eye on the key levels in the table above.
Good luck today.
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