Technical analysis for FTSE 100 for 26th June 2024
Britain's FTSE 100 closed lower on Tuesday as investors stayed cautious ahead of economic data that could sway expectations on the path of U.S. and UK interest rates, and Burberry's losses weighed on the market.
The blue-chip FTSE 100 was down 0.4% at 8,247.79 points, while the mid-cap FTSE 250 dipped 1%.
Traders largely avoided big bets ahead of the U.S. personal consumption expenditure data (PCE), due Friday, even as the market anticipated the numbers will show inflation moderating.
UK gross domestic product (GDP) is also due this week and could potentially add to Bank of England (BoE) policymakers' confidence of an interest rate cut in August.
UK parliamentary elections on July 4 are adding to general caution and investors also expect the BoE to refrain from releasing minutes of its meeting ahead of the polls.
Asia & Overnight
Asian stocks stuttered in choppy early trade on Wednesday as markets braced for a key U.S. inflation reading, while the yen lurked just shy of 160 per dollar level, keeping traders on alert for another round of intervention by Japanese authorities.
Risk sentiment was also capped as hawkish comments from Federal Reserve officials kept near-term U.S. rate cut expectations in check in a boost to the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed at 566.55 in choppy trading, inching away from the two year high of 573.38 it touched last week. The index is still up 3.5% in June, on course for fifth straight month of gains.
China stocks, however, edged lower with blue-chip CSI300 Index and the Shanghai Composite Index both down 0.2% and headed for decline of 4% for the month. Hong Kong's Hang Seng index was also off 0.16%.
On the U.S. monetary policy front, Fed officials urged patience on interest rate cuts, with governor Lisa Cook saying the central bank is on track for a rate cut if the economy’s performance meets her expectations. But Cook declined to say when the Fed will be able to act.
U.S. Federal Reserve Governor Michelle Bowman reiterated her view that holding the policy rate steady "for some time" will probably be enough to bring inflation under control.
Traders are eagerly awaiting Friday's release of the U.S. personal consumption expenditures (PCE) price index - the Fed's preferred measure of inflation, with economists polled by Reuters expecting the annual growth to ease to 2.6% in May.
In commodities, oil prices were little changed in Asian trade, with Brent crude oil futures flat at $85.02 a barrel, while U.S. West Texas Intermediate crude futures were at $80.9 per barrel.
FTSE 100 technical analysis for today, 26th June 2024
Bear Tuesday kicked in as expected with the drop off the 8315 level gaining some momentum. However overnight the bulls have fought back from the 8220 level and we may well be on for a bit more upside again today. 8283 is initial resistance from the bearish 2h chart so this will be the first hurdle for the bulls to get through.
An opening dip down to the daily pivot area at 8250, and to also test the 30m 200ema and coral, would make sense and I would like to see this hold to add some strength into today.
Ultimately the bulls will be looking to break above the 8315 resistance area as that opens up the 8360 daily level and also R2 at 8353. If we do manage to get to this area then we could see a stutter here and a drop back down to test the 8300 level. The top of the both the Raff channels are here as well as you can see on the daily chart below.
If the bears were to break below the 8250 level today then 8200 is the next main support, with the round number, key fib and S1 all here. A such, should we see this then long here is worth a go for a bounce.
The10d Raff channel continues to head up in a positive sign for the bulls and we may well see a test of that higher level this week if the news flow is positive. Nvidia helped the bulls yesterday in the US, snapping its losing run. We head into more significant news tomorrow onwards as well with a few key releases including Fridays PCE one in the US. As such we could see some buy the rumour sell the news play out. We have also had the S&P500 end of June weakness playing out based on the seasonality mentioned yesterday. July is more optimistic so traders may well start to position for that as well.
In a nutshell, keep an eye on the 8283 level to start with then 8315, 8360 for resistance. 8250 for support.
Good luck today.
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