Technical analysis for FTSE 100 for 27th June 2024
London stocks closed lower on Wednesday for the third straight session, mirroring European bourses, while energy shares weighed the most and investors were on edge ahead of the Federal Reserve's key inflation gauge set for release on Friday.
The blue-chip FTSE 100 edged 0.3% lower while the mid-cap FTSE 250 also slipped 0.3%. The pound dipped 0.5% against the dollar, as investors funnelled funds into the greenback amid growing caution ahead of Friday's release of the personal consumption expenditures price index.
In the UK, investors will watch out for UK gross domestic product (GDP) on Friday for further clues on the direction of interest rates in Britain.
Moreover, Britain's parliamentary elections, scheduled for July 4, are adding to the caution, with investors expecting political uncertainty to impact markets. The Oil and gas sector ticked 0.6% lower, tracking lower oil prices after U.S. EIA's report.
Asia & Overnight
Asian shares fell and bond yields spiked on nervousness about inflation on Thursday, while the yen's slide past 160-per-dollar had currency traders bracing for Japan to step in and steady it.
The dollar made six-week highs on sterling and the kiwi and at 160.7 yen traded just shy of Thursday's 38-year peak. The jittery mood had frothy sectors of financial markets especially vulnerable and Nasdaq futures dropped 0.5%.
Shares in bellwether chipmaker Micron Technology slid 8% in U.S. after-hours trade as it met rather than topped lofty revenue expectations. Japan's Nikkei fell 1%.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5%, with some of the largest losses in Australia where rate sensitive stocks sank following Wednesday's data showing a surprise jump in inflation.
Australia's inflation surprise also follows a similarly unexpected jump in Canadian inflation and infused some extra nerves into markets awaiting the next reading of the Federal Reserve's preferred measure of U.S. inflation on Friday.
Later on Thursday U.S. GDP, European confidence figures, a speech from Australia's deputy central bank governor, and a rates decision in Sweden will be in focus ahead of the first U.S. Presidential debate.
FTSE 100 technical analysis for today, 27th June 2024
The 8200 level was defended yesterday despite the bulls being unable to break above the 8315 resistance level previously. That resistance remains in play for today, though we have resistance initially at the 8240 level with the daily pivot and the 200ema here.
As such we may well see a dip and rise play out today, with a test of the slightly lower, but strong, support at the 8180 level. The ASX200 had a similar pattern and we have some key news out later in the US. At 13:30 we have durable goods orders, with a forecasted drop to -0.1% and GDP Q1 - forecasted to have dropped to 1.4% from 3.4% previously. If that comes to pass, traders may well pin their hopes on rate cuts sooner rather than later.
Above the 8240 resistance level then the 8292 key fib is next up and just above the R1 level at 8278. As such, if we see this level then a short there is worth a go. Above this then 8315 remains in play as well, with 8360 above. I am not expecting it to get that high today, especially as we have a red 2h coral to jump at 8270.
The 10d Raff channel on the daily chart is heading up well now though, and with the bottom of that channel holding at 8200 yesterday we may well see the bulls start to gain the upper hand again. The S&P500 is certainly trying to climb at the moment and defending the 5450 level. The bottom of the 20d Raff channel is also there on that.
Support wise for the FTSE100, 8180 is the next strong one for today if we were to dip below the 8200 level, with 8141 below that. 8120 is then also on the radar as that was the decent support level earlier in June.
That said, I would like to see the 8180 area hold if it were to be tested, as that would consolidate the strength pretty well. We have the UK GDP figure out tomorrow as well, with 0.2% forecasted, up from the -0.2% previous one, so bulls will be hoping that comes to pass (as will the government!).
The election also looms closer, and markets proving quite resilient so far.
Good luck today.
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