Technical analysis for FTSE 100 for 11th June 2024
UK stocks slipped on Monday, tracking losses in European stocks after French President Emmanuel Macron called a snap parliamentary election, while uncertainty around the timing of interest rate cuts in the United States also weighed.
Britain's blue-chip FTSE 100 closed down 0.2%, while the mid-cap FTSE 250 fell 0.5% for a second straight session of losses.
Political uncertainty in Europe made UK investors more cautious after Macron's decision on Sunday to call an election after a bruising loss in a European Parliament ballot.
Traders were also still assessing the impact of Friday's blow-out U.S. jobs report, which dampened hopes for a September rate cut by the Federal Reserve.
The European Central Bank began its rate cutting cycle last week with a 25 bps trim.
Investors now await Britain's wages and GDP data, due later in the week, to gauge the Bank of England's monetary policy path ahead of its next meeting this month.
Asia & overnight
Asian stocks traded in a narrow range on Tuesday, as investors pondered fresh political uncertainty in European markets after right-wing gains in elections and a snap poll in France revived concerns about the cohesion of the bloc.
Moves were modest, with MSCI's broadest index of Asia-Pacific shares outside Japan dipping 0.4% in thin trade, with Chinese blue chips off 0.7%. Going the other way, Japan's Nikkei firmed 0.3% and South Korea stocks rose 0.5%.
EUROSTOXX 50 futures also edged up 0.2%, steadying after Monday's retreat, while FTSE futures rose 0.1%.
The euro, French stocks and government debt had been shaken after investors assessed whether the right wing can repeat their success in French elections and how much sway far-right parties can have on the new European Union executive.
Bond yields rose across Europe, with the spread between French and German debt widening notably, after an opinion poll suggested the far-right National Rally could win the snap election, albeit without a clear majority.
Elsewhere, markets gave a muted reaction to Apple's long-awaited AI strategy, which integrates "Apple Intelligence" technology across a suite of apps. The iPhone maker's shares were down 0.3% in after hours trade, having slipped 1.9% in normal hours.
S&P 500 futures and Nasdaq futures both eased 0.1% in Asian trading, after edging higher on Monday.
The market has, so far, proven remarkably resilient to the jump in U.S. yields that followed Friday's jobs report and the pull back in expectations for Federal Reserve rate cuts.
Wall Street warning
While the S&P 500 eked out another record-high close on Monday, banks from JPMorgan to Citigroup say investors should prepare for large swings in equity markets ahead of the latest inflation data and Federal Reserve policy decision — both of which are due on Wednesday. The options market is betting the US benchmark will move 1.3% to 1.4% in either direction by Friday, according to JPMorgan’s Andrew Tyler. That comes amid expectations for US core consumer prices to have moderated in May to the slowest pace in three years, on an annual basis.
FTSE 100 technical analysis for today, 11th June 2024
The bulls fought back well yesterday and the 8170 level held well to enable a touch of the 8250 level yesterday evening. That remains as initial resistance for today and we have the UK employment data due out as I write this (it's just come in as positive). The climb yesterday may well have been a precursor to the data as well (leak or guess, take your pick....)
We have the 30m 200ema at 8247 and the red 2h coral at 8249, as well as that 25ema on the daily at 8260 as mentioned yesterday which has now gone bearish given the drop off the 8350 area last week. As such a drop back to start the day and at least start off with a bear Tuesday attempt would fit the chart well, to drop down and test the 8170 support level again.
8166 remains the daily support level and having bounced just above this it looks like pretty viable support.
Initially though the daily pivot and green 30m coral at 8222 is major support to start with today, so if we do see some profit taking as the news gets digested we could drop down to here to start with. Below this 8194 is S1 then that 8170 level as mentioned.
If the bears were to break 8165 though then a slide down to the round number at 8100, and S3 at 8114 may well be on the cards though I am not expecting it to get that low. 8150 is also the bottom of the 10d Raff channel. That said, should we see the bears have a go today then I would like to see that 8170 level hold again and would also set up a double bottom bounce ahead of tomorrow's US inflation data/Fed rate decision.
Given that is big news tomorrow, a drop back this morning then a climb later as buy the rumour, sell the news plays out would make sense.
After yesterday's climb the 2h chart has gone bullish and at 8234 as support from the Hull MA.... so it will be up to the bulls to try and push above the red coral at 8249 and the 25ea at 8260.
The ASX200 had a dip and rise and we may well follow suit, though oil prices ticking back up will help the commodity heavy FTSE100.
Good luck today.
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