European indices posted sharp gains on Tuesday with the FTSE outperforming its peers as it rose 2.04% amid positive corporate earnings both from the US and the UK. Moreover disappointing UK services data prompted further declines in the sterling, boosting London’s blue chip index. Going forward, our main focus will be on how the BOE will respond to risks of economic growth today, given all the uncertainty surrounding Brexit.
The FTSE extended its rally as it surpassed resistance at 7140. Despite an RSI reading sitting at the overbought threshold, enough upside momentum will enable the price to remain above the 10-period MA whilst rising with the upper band to take out resistance zone of 7200/7220. On the other hand, a halt in bullish momentum will keep price action above key support of 7070 at the 20-period MA.
Support: 7070/ 7000
Resistance: 7220/ 7300