The FTSE traded 0.64% lower on Monday as disappointing Chinese trade data as well as a rising pound weighs on the internationally exposed index. The pound was bolstered by better than expected GDP and manufacturing data as the UK economy suffered from political uncertainty. Moreover, PM Johnson’s unexpected comments on wanting to seal a Brexit deal aided the lift in the pound. Today, the UK publishes employment data which is likely to influence the pound which may continue to limit upside potential on the FTSE in today’s session. Apart from the data, expect Brexit headlines to hold stronger influence over market sentiment and price action.
The FTSE lost 46 points to end at 7235 on Monday. The price recorded a high of 7325 before turning lower to record a low near the support at 7200. Trading and closing below the 7235 level would indicate there is further downside to come for the FTSE. It is worth noting that the FTSE is confined within the Bollinger bands and should exit this range to determine further direction. Look for a trade below 7200 to target the support at 7180 followed by 7150. On the other hand, look for price to trade above the 7260 level near the 20-period MA to indicate buying pressure and target the upper end of the ranging zone near the 7315 resistance level.