The FTSE saw Monday’s risk averse flows reverse as fears over escalating tensions between the US and China eased. President Trump helped boost sentiment with reassuring comments on the potentiality of a trade deal, however uncertainty persists and further trade developments will continue to determine market direction. In the UK, disappointing employment data prompted a decline in the pound which provided further support for the FTSE that benefits from a lower domestic currency. A lack of trade news today should leave the FTSE under the influence of economic data as the Eurozone publishes 1st quarter GDP and US publishes retail sales figures.
The Footsie bounced off of the support found at 7150 to end at 7241 on Tuesday. The index may extend gains to form a lower high on its downtrend before it turns to the downside again. Should price hold above the 20-period MA around 7240, price would target the resistance zone of 7280/7300 separating the FTSE from further gains. Failure to maintain price action above 7240 would lead price lower towards support at 7200 before re-testing its low around 7150.
Support: 7200/ 7150
Resistance: 7280/ 7350