The FTSE ended virtually flat as it gained 5 points to end at 7220 on Wednesday. Gains were capped by declining oil prices and a slightly higher pound, while the upside move was supported by a dovish Fed and a semblance of easing global trade tensions as China and Mexico express a willingness to negotiate with the US. Trade headlines should continue being monitored as a negative shift in developments would weigh on the FTSE. Moreover, today’s attention will be drawn to the ECB conference meeting which is unlikely to see a move on monetary policy but rather provide an outlook on its course and the region’s economic performance.
The FTSE managed to break the sequence of lower highs on its downtrend as it traded above the resistance at 7230 this week and increases the chances of seeing further upside moves. The index is attempting to extend gains past the 7260 level which would make room for price to drift towards the resistance at 7310 if overcome. Failure to do so would maintain price action below the 20-day MA around 7250/7260 and lead the FTSE towards the lower support at 7200 coinciding with the 20-period MA which would determine near-term direction for the day.
Support: 7200/ 7170
Resistance: 7260/ 7280