Technical analysis for FTSE 100 for 2nd July 2024
London's FTSE 100 began the week on a steady note on Monday, supported by housebuilders and precious metal miners, while investors remained cautious ahead of Britain's July 4 election.
The blue-chip FTSE 100 was flat, just snapping a four-session losing streak. The mid-cap FTSE 250 was down 0.3% to 20,222.08 points.
Opinion polls suggest Labour Party leader Keir Starmer is set to replace Conservative Rishi Sunak as prime minister following Thursday's parliamentary elections. Over the weekend, the first-round voting in France's shock snap election was won by the far right.
Asia & Overnight
Asia lagged what was a pretty solid start to the new quarter for global stocks on Monday, and the steep rise in U.S. Treasury yields suggests it will be difficult session again on Tuesday for regional equities and emerging assets more broadly.
The 10-year U.S. yield jumped 13 basis points to 4.50% on Monday - the highest yield and biggest one-day rise in a month - as investors repriced the potential inflationary impact from mooted fiscal, tariff, and immigration policies under a Donald Trump presidency.
Wall Street, European, and world stocks powered through that headwind, Japanese stocks got a lift from the yen's slide back through 161.00 per dollar, and Chinese stocks drew strength from a positive surprise in domestic manufacturing sector data.
But broad measures of Asian and emerging equities flatlined and they may struggle to rebound meaningfully, if at all, in the face of such a sharp rise in dollar-denominated borrowing costs.
FTSE 100 technical analysis for today, 2nd July 2024
It's looking like a bear Tuesday will play out today as the bulls failed to break above the 8220 level yesterday and we have dropped steadily. The bounce off 8180 was also fairly short lived. A dip down to the next main daily support level at 8120 would make sense and may well happen today, and a bounce at that level looks possible.
The 2h chart remains bearish with the red coral capping the bulls yesterday at the 8220, and that resistance has dropped to 8195 now. The Hull MA is also at 8165 for today so initial resistance there to start with.
Initially we have the daily pivot at 8179 as well, should it pop through that 2h level, and the daily chart remains bearish with the Raff channels and EMAs remaining bearish. With the election looming as well then caution abounds and the buying appetite will be diminished.
Below the 8120 support level, and we also have the key fib here, then S2 is 8102 and tying in with the round number so the bulls would be keen to defend that. Lower down the 8072 level is the next one to keep an eye on.
The bottom of the Raff channels are also both around the 8080 level.
The election is weighing on the action at the moment for the FTSE100, though the US markets look a bit more positive and if the S&P500 can break above the 5480 level then we should see a bit more optimism on them. We have a speech from the Fed's Powell at 14:30 today as well, which could help boost the bulls later.
If the bulls were able to break above the 8180 level then I am looking at the 8195 level where we have the 200ema, and also the red coral still, with the 8230 key fib above that. That also would set up a double top with yesterdays high. All that said, I feel that the 8180 level may well be a pretty strong resistance for today.
Good luck.
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