The FTSE traded 0.09% lower on Wednesday as the Fed delivered the widely expected rate cut after the European market closed. In terms of data, UK’s annual rate of inflation disappointed as it fell to 1.7%, its lowest level in three years. Today, FTSE traders should monitor the BOE policy meeting from which markets are expecting interest rates to remain unchanged. Moreover, the UK publishes retail sales data for August which is estimated to decline. Look for weakness in the pound to buoy the FTSE while accounting for a backdrop of a prolonged US-China trade war and Brexit uncertainty. Traders should also monitor trade and geopolitical headlines to influence market sentiment and the global economic outlook.
The FTSE declined by a mere 6 points to end at 7314 on Wednesday. The price traded within the tight range of 7300-7350 as the index remained directionless around the 20-period MA . Today, look for a move above 7350 to indicate buying pressure with a break above the high of 7380 required to signal a bullish continuation. Holding above 7300 would maintain the ascending trend line tracing the FTSE’s sequence of higher lows and lead the FTSE back up. Failure to hold above 7300 would lead price to the lower support at 7265 followed by the 7200 level which separates the FTSE from a bearish phase.