Technical analysis for FTSE 100 for 25th June 2024
London stocks kicked off the week on a positive note, driven by gains from life insurer Prudential, although caution lingered ahead of inflation data from the United States that could set the outlook for global interest rates.
The blue-chip FTSE 100 closed 0.5% higher, touching a three-week high and hitting the psychological 8,300 mark earlier in the session. The mid-cap FTSE 250 gained 0.6%.
Prudential also boosted the life insurance sector to a two-week high, with a 7.3% jump after it announced a $2 billion buyback plan.
This week, the UK will release its Gross Domestic Product (GDP) numbers that will provide more insight into the state of the British economy. Strong retail sales data on Friday tempered some of the optimism that followed comments from the Bank of England.
The bank kept interest rates unchanged on Thursday, and dovish comments from policymakers raised expectations of an August cut.
A domestic inflation report last week showed that headline inflation in the economy had fallen to 2% - the BoE's target.
The looming British parliamentary election, which is less than two weeks away, added to market caution.
In the U.S., investors are looking to personal consumption expenditure numbers (PCE) due on Friday for signs inflation has eased.
Asia & Overnight
Asian shares were subdued on Tuesday while the battered yen hit a record low versus the euro, although the risk of intervention stemmed further weakness against the U.S. dollar.
Treasuries were little changed as caution set in ahead of key U.S. price data on Friday. With the first U.S. presidential debate on Thursday and the first round of voting in the French election at the weekend, investors remain cautious of how political shifts in major economies could impact their positions.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.3% higher, after falling 1.4% in the past three sessions. Japan's Nikkei rose by 0.5%.
MSCI Asia-Pacific ex-Japan IT index slid 0.5%. Taiwanese shares fell 0.4%.
Overnight on Wall Street, the Nasdaq tumbled over 1%, dragged lower by a 7% drop by AI bellwether Nvidia as investors rotated out of technology stocks. The Dow Jones, however, rallied 0.7% to a one-month high.
S&P 500 futures and Nasdaq futures were flat. Looking ahead, the much watched U.S. personal consumption expenditures (PCE) price index is due on Friday. Annual growth in the Federal Reserve's favoured core inflation index is expected to slow to 2.6% in May, the lowest in more than three years. A low result would likely reinforce market bets on a Fed rate cut as early as September, which futures currently price as a 65% prospect. Two rate cuts are priced in for the year.
Oil prices were flat for the day. Brent futures held at $85.95 a barrel while U.S. crude was little changed at$81.60 a barrel.
FTSE 100 technical analysis for today, 25th June 2024
Decent bull Monday for the FTSE100 yesterday with it pulling away from the 8200 area and almost managing a test of the 8317 daily resistance level. That area has held overnight as resistance and as such we may well see an initial dip down to start with today. The ASX200 had a bullish session which may well help the FTSE100 to do the same initially, especially if any early drop gets defended.
Initial support is at the 8269 daily pivot and then 8247 200ema below that. With the rise yesterday the 2h chart has gone bullish again and the Hull MA is at 8281 also. That has held overnight so it will be interesting to see if it also gets defended in hours. An early test of this level would also make sense.
The daily chart EMAs didn't remain bearish for long, and have now crossed over to bullish once again as the bulls build on the bounce from 8120. The 25ema support is at the 8240 level for today, so should the bears break below the daily pivot that also lends some weight to this area. Probably worth a long here also.
Resistance wise, then the 8317 daily level as mentioned is the one to watch to start with, and then 8360-8370 above that. We have a R2 at 8370 and that also splits the two Raff channels. 8360 is also daily resistance and I would expect to see a stutter in this area.
If they were to break above the 8370 though then 8392 is the top of the 10d Raff and another level that is worth shorting.
Main news of note today is the 15:00 CB Consumer confidence for June in the US - the forecast is for a slight drop to 100 from 102 previously.
The US markets have weakened and we are seeing a bit of rotation out of Tech stocks, with Nvidia leading the way yesterday. The inevitable profit taking after the significant rises recently as well. The Raff channels continue to head upwards though on both the S&P500 and Nasdaq, along with positive EMAs so we could see some buy the dip action into early July if they continue to drop.
The seasonality chart for the S&P500 does have a drop at the back end of June as well and that seems to be playing out.
Good luck today.
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