Monday, November 4, 2019

FTSE100

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Fundamental Highlights

The FTSE traded 0.75% higher on Friday as global markets found support on a strong US Jobs report and better than expected Chinese manufacturing data. Markets’ attention was largely tuned to economic data which helped overshadow any doubts on the global trade front as the US and China have yet to confirm progress made during a call on Friday with a signed agreement. While a cautiously optimistic sentiment towards US-China trade relations may help buoy the FTSE, it remains vulnerable to downside pressure for lack of certainty over Brexit as well as subsequent trade headlines. Apart from geopolitical headlines, look to Manufacturing PMI figures out of the Eurozone and Germany to have a potential impact in the case of disappointing data.

Technical Analysis

The FTSE gained 54 points to close at 7302 as price rebounded off of the 7248 support level however respected the resistance provided by the 20-period MA around 7300. Today look to the 20-period MA to provide direction as a sustained move above 7300 would indicate buying pressure and lead the FTSE to a re-test of the 7350 resistance level that would clear the path towards the higher levels at 7375 and 7400. A decline below 7300 would indicate selling pressure while a break and sustained move below the 50-period MA at 7250 would suggest further weakness where the lower support levels at 7200 and 7130 come into play. It is worth noting that the 4H RSI reading is trending lower while price drifts lower suggesting that 7350 may be the lower high that tracks the broader downtrend since July’s high.

Support: 7250/7200
Resistance: 7350 /7375

Chart (H4)
FTSE100