The FTSE traded 0.96% higher on Wednesday as European stocks received a boost from positive trade developments and the anticipation of economic stimulus in today’s ECB policy meeting. On the global trade front, China announced it would exempt certain US products from its retaliatory tariffs and today President Trump announced he would delay tariffs on China. The news should buoy positive sentiment as market participants await the ECB meeting which is expected to provide economic stimulus beyond a rate cut. Meanwhile in the UK, PM Johnson’s suspension of parliament was ruled unlawful and leaves Brexit uncertainties lingering after the government published risks of a no deal Brexit scenario. Nonetheless, look to today’s ECB policy meeting to drive price action while a steady pound should enable further gains in the FTSE.
The FTSE added 70 points to end at 7338 on Wednesday as price managed to trade above the 7315 level however remained below the resistance at 7345. Look for price to hold above 7315 to maintain buying pressure while a break and sustained move above the resistance zone bounded by 7345 and 7360 near the 50-day MA would enable the FTSE to extend gains towards 7380 and 7400. On the other hand, failure to hold above the 7315 level should lead price towards the lower support provided by 20-period MA at 7275 followed by 7235.