The FTSE declined by 0.46% to end at 7357 on Thursday as it was dragged down by its mining sector. The continued decline in oil price was however offset by better than expected earnings from FTSE’s oil major Shell. Meanwhile in central bank news, Governor Carney kept interest rates steady while signaling gradual rate hikes in the future as economic activity should pick up alongside the slow but nonetheless fading cloud of uncertainty over Brexit. Moreover, The BOE upgraded Britain’s growth forecast in the next three years citing stabilized global growth and subsiding fears over Brexit. Traders should monitor oil prices as a continuous decline may further weigh on FTSE’s recent weakness.
The FTSE extended losses on Thursday as it the reached support zone of 7340/7350. The RSI reading has approached the oversold territory however given that the FTSE has fallen below the rising trend line support from December’s low bearish momentum may be on the rise and drive the index towards lower support at 7320 before a potential turn to the upside. However, should 7350 hold as support, look for price to drift towards the 20-period MA with a move above 7400 required to indicate the presence of buying pressure.
Support: 7320/ 7290
Resistance: 7380/ 7420