Technical analysis for FTSE 100 for 17th June 2024
Britain's FTSE 100 marked its longest weekly losing streak since March 2020 on Friday, as investors grappled with uncertainty around the outlook for interest rates and political turmoil in Europe. The blue-chip FTSE 100 index slipped 0.2%, logging its fifth straight weekly decline.
The FTSE 250 midcap index also fell 0.2%, closing at its lowest level in over a month in a third straight week of losses.
The knock-on effects from French President Emmanuel Macron's gamble to call snap elections, a hawkish projection from the U.S. Federal Reserve and weaker-than-expected UK GDP data for April weighed on the British markets this week.
Investor focus is now on the domestic inflation report and the Bank of England's (BoE) monetary policy meeting - the last before the July 4 election - due next week.
The British public's expectations for inflation cooled last month, a BoE survey showed, and the highest proportion since the global financial crisis thought it would be best for the economy if interest rates fell.
Asia & Overnight
Asian share markets were mostly softer on Monday as mixed Chinese economic news underlined the country's bumpy recovery, while political uncertainty in Europe soured risk appetites and kept the euro on the defensive. Chinese blue chips were off 0.2% after retail sales topped forecasts by rising 3.7% in May, but industrial output and fixed-asset investment both underwhelmed.
Other data showed home prices fell at the fastest pace in a decade in May, highlighting the continued strains in the property sector.
The People's Bank of China (PBOC) kept its one-year rate unchanged, dashing some speculation of a cut following surprisingly soft bank lending data.
China's official Financial News on Monday reported there was still room to lower rates, but there were internal and external constraints on policy.
That made for cautious trading, and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1%.
Japan's Nikkei slipped 1.7%, with investors now facing a six-week wait to hear details of the Bank of Japan's next tightening steps.
EUROSTOXX 50 futures bounced 0.3% after last week's steep losses, while FTSE futures edged up 0.4%. S&P 500 futures were steady, while Nasdaq futures added 0.1% following a run of record finishes.
Analysts at Goldman Sachs have raised their year-end target for the S&P 500 to 5,600, from 5,200 and the current 5,431.
Central banks in Australia, Norway and the UK are all expected to hold rates steady at meetings this week, though the Swiss National Bank (SNB) might well ease given the recent strength of the Swiss franc.
Oil prices eased a touch after rallying 4% last week amid hopes for stronger demand from the U.S. driving season. Brent dipped 17 cents to $82.45 a barrel, while U.S. crude fell 18 cents to $78.27 per barrel.
FTSE 100 technical analysis for today, 17th June 2024
Friday saw the dip and rise play out, with the bulls defending the 8120 area and we have managed to retest the 8200 level. That has acted as resistance so far but the 30m chart is now looking more optimistic for a bull Monday, at least to start with. We may well get a rise and dip play out today.
Initial support is at the daily pivot and the green 30m coral at the 8160 area, and the bulls will be keen to defend this. If they manage to do so then we may well get a rise towards the 8240 area.
8156 is now also 2h Hull MA support following the bounce from the 8120 level, so it would be good to see this hold, despite the bearish daily chart that we now have. Both the Raff channels are heading down, as well as bearish EMAs as well. June so far being quite bearish in contrast to the sentiment chart which has it being more positive.
Below 8155 and a revisit to Fridays low would be quite likely, with 8116 being S1 and also the key fib. We may well set up a double bottom bounce here then, as a break lower would get things pretty bearish and a test of the S2 at 8065 level.
Resistance wise for today, I am looking at the 8240 level with a possibility of the 8263 above that. 8240 has a couple of key daily resistance levels in play and also the 10d Raff channel top. As such, the bulls may have a bit of a task to push past this, at least initially and a short here is worth a go. That would also make sense as a decent profit taking area for those long from the 8120 area.
If they were to push past 8260 though (and bear in mind we have R2 here as well) then 8314 is R3 and a test of the 8300 level would give the bulls their mojo, especially as we have the top of the 20d Raff channel here. We start getting into breakout north territory as well then and a reversal of the recent declines. I don't think we will get that high today though.
No major news today, but we head towards inflation on Wednesday and then the BoE rate decision on Thursday (expected to rain at 5.25%) so maybe won't get too many wild moves today and tomorrow.
Good luck today.
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