Technical Analyst, Saxo Bank
FTSE 100 is doing better than the FTSE 250. However, it has broken below the key support at 7.000 and is likely to test the support at 6,823. If taking out the trough from March this year at 6,787 the selling pressure could accelerate pushing the Index down to support area at 6,484-6,397 and the 0.618 retracement at 6,351.
RSI is back below 40 and if closing the week below it supports bearish outlook.
FTSE 100 has over the past 1-1½ formed a double/triple top like pattern (not the most perfect one!) However, as a rule of thumb when a double/triple top pattern unfolds and is confirmed by a close below the deepest valley in the pattern price can move the same distance at the high to low distance of the pattern. The deepest valley of this pattern is 6,787 and if FTTSE 100 closes below there is a potential target of 6K indicated by the two vertical arrows.
However, since this is not the most perfect pattern the target price might be closer i.e., the support area around 6,484-6,397.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.