The FTSE recorded a modest rise of 0.33% on Wednesday as trade headlines improved sentiment towards the US-China trade situation. It was reported that China was open to a partial trade deal as it is seeking to limit US tariffs given that the US’s recent blacklisting of Chinese tech companies undermines the potential for progress in their trade negotiations today. Meanwhile Brexit uncertainty persists as the EU and UK struggle to reach a deal ahead of the October 31ST deadline. Separately on economic data, the UK publishes GDP and industrial production data. Disappointing figures may weigh on the pound which would normally help buoy the FTSE. However, more significant factors are at play as US-China trade negotiations begin today. Trade and Brexit developments will ultimately remain the key drivers of price action and determinants of sentiment.
The FTSE gained 23 points to end at 7166 on Wednesday. The price remained below the 20-period MA and has yet to take direction as it maintained range-bound movement. Look for a sustained decline below 7150 to indicate selling pressure and target the lower support levels at 7130 and 7080. Meanwhile, holding above 7150 would leave price ranging with resistance at 7200 acting as a hurdle for further gains. Taking out the high at 7223 would be required to signal a bullish continuation for the FTSE.
Resistance: 7200 /7240