The Footsie declined by 0.4% to end at 7385 on Wednesday. Earlier in the day, positive corporate updates helped lift the blue-chip index before it nudged lower as its energy sector was weighed down by a rise in US oil supply. Moreover, the pound shrugged off missed expectations on UK Manufacturing PMI and remained buoyed by positive Brexit headlines thereby limiting the upside on the FTSE. In central bank news, yesterday’s FOMC meeting left interest rates unchanged and today’s BOE policy meeting is expected to follow suit. Markets will focus on remarks about the British economy amidst Brexit uncertainty which may influence sentiment for the day.
The FTSE traded lower on Wednesday and ended around the crucial support zone of 7370/7380. The price is pointing lower today, with the FTSE breaking below the rising trend line support from December’s low to signal a bearish development. Meanwhile, the RSI reading has reach the oversold territory, however bearish momentum may drive the index below the 7350 level after which it may find support at 7320. The price would have to edge above the 20-period MA around 7430 to negate the bearish outlook.
Support: 7320/ 7290
Resistance: 7380/ 7430