The FTSE traded lower on Tuesday as did global markets as tension between US-China seemed to have escalated ahead of their anticipated trade talks tomorrow. The US blacklisted additional Chinese tech companies from doing business with the US and restricted visas to Chinese officials. The developments not only suggest that trade progress is improbable, but run the risk of provoking a retaliation from China. Meanwhile on Brexit, EU officials bridled at PM Johnson’s failed attempts to make progress and the UK later stated that a deal seems unlikely. A lack of major economic releases today will leave attention largely tuned to trade headlines and Brexit updates. Market participants are expected to remain in risk off mode as US-China negotiations await tomorrow.
The FTSE lost 54 points to end at 7143 on Tuesday. The price briefly traded higher and tagged the 20-period MA at 7223 before turning lower and ending the short-term rebound. Today, look for a sustained move below 7150 to maintain selling pressure with a decline below 7120 required to drive the FTSE towards the lower support at 7080. Look to the 20-period MA to provide a dynamic resistance as the bears attempt to gain back control.
Resistance: 7180 /7200