Technical analysis for FTSE 100 for 24th June 2024
London stocks closed the week on a positive note after domestic inflation fell to the Bank of England's 2% target earlier this week, raising bets of an interest rate cut in August, but a hot reading of the retail sales tempered some of that optimism.
The FTSE 100 was down 0.4% on the day, while it logged a 1% advance for the week and snapped a five-week losing streak. The mid-cap FTSE 250 fell 0.3% on the day but held some ground to log its first weekly gain in four.
British retail sales rose by 2.9% in May, rebounding sharply from a revised 1.8% decline in April. Economists' poll had forecast sales volumes would increase by 1.5%. Meanwhile, British businesses are expanding at the slowest pace since the economy was in recession last year, as some companies put big decisions on hold until after July 4's election.
Investor sentiment in Britain is gradually brightening after comments from the BoE on Thursday brought an August rate cut into play and inflation returned to its 2% target for the first time in nearly three years in May. Markets are currently pricing in a 47% chance of a rate cut in August.
Asia & Overnight
Asia shares slipped on Monday in a countdown for U.S. price data that investors are banking on to show a renewed moderation in inflation, while markets were on alert for possible Japanese intervention as the dollar tested the 160 yen barrier.
Geopolitics also loomed large, with the first U.S. presidential debate on Thursday and the first round of voting in the French election at the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9%, after touching a two-year top last week. South Korean stocks fell 0.8%.
S&P 500 futures and Nasdaq futures were both down around 0.1%. Shares in Boeing could face pressure after Reuters reported U.S. prosecutors are recommending criminal charges be brought against the aircraft maker.
EUROSTOXX 50 futures eased 0.2%, while FTSE futures lost 0.3%.
Manufacturing surveys from the United States, in contrast, showed activity at a 26-month high in June, though price pressures still subsided considerably. The latter shift whetted appetites for the personal consumption expenditures (PCE) price index due on Friday. Annual growth in the Federal Reserve's favoured core 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.
Oil prices also eased a touch after rising around 3% last week. Brent slipped 17 cents to $85.07 a barrel, while U.S. crude lost 18 cents to $80.55 per barrel.
FTSE 100 technical analysis for today, 24th June 2024
Off we go for another week and the election looming closer and closer. Markets are standing up well so far as the climb from 8120 continue to play out. The 10d Raff channel is still heading up though the bulls will be wanting to pull away from the 8200 level this week.
Initially today we have resistance at the 8254 level with the Hull MA here, and just above the daily pivot and red 30m coral at 8230. As such, we may see an early rise (and continuation of the overnight bounce) falter here for a drop back to test the 8190 key support area. This held well on Friday with the spike down on option expiry and as such will now set up a decent double bottom.
The S&P500 will also be looking to defend and build on the recent low at 5450 which if they manage to do so will help buoy up the other markets, including the FTSE100. We also head towards the YoY GDP figure on Friday in the UK and if that comes in as forecast at 0.2% then that will help the bulls.
So with a few resistance levels in play to start with at 8255 and then 8290 - R1 and the key fib here, as well as daily resistance, the bulls may well encounter some strong bearish action at these levels.
Above the 8290 level then 8310 is the top of the 20d Raff channel and the next level to keep an eye on, and that is also just below the daily level at 8319. I don't think we will be testing this area today but if we were to do so then a drop from here may well play out.
Support wise, 8190 as mentioned and then below that the 8125 level is next up. We may well see a bit of a bull Monday attempt anyway to start the week though 8255 will be key to be broken. The daily EMAs are also still bearish and we are just trotting to break above the 25ema again which is at 8237.
No major news out today apart from the Ifo business climate in Germany at 0900.
Good luck today.
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