The FTSE index traded 0.28% lower on Friday as the release of an IMF report highlighting the risks Brexit and global trade uncertainty poses to the Eurozone economy weighed on sentiment. Moreover, the sterling has gained some ground and is limiting upside potential on the FTSE alongside Brexit uncertainty. On trade news, President Trump criticized China on trade practices and threatened to retaliate against France’s latest digital tax targeting US tech giants. Today, China releases trade balance data for June which may influence the FTSE alongside trade headlines.
The FTSE gradually drifted lower to fall by 20 points and end at 7509. The price traded below the 7520 level and will now look to the support zone of 7500/7490 to determine whether the FTSE should extend its declines towards the support at 7470. Trading and holding above the 7520 level would be required to target the resistance zone bounded by the 20-period MA and 7570 level. Until price makes a decisive break beyond the range of 7500-7570, we can expect the FTSE to remain in a consolidation phase.