The FTSE continued to trade lower as it fell by 0.56% on Wednesday amidst weak earnings reports. Moreover, the UK parliament voted for a proposal that would avoid the potential of a no-deal Brexit while UK economic data showed retail sales unexpectedly rose to 1% in June. The recent developments provided the pound with a lift which left the FTSE with no upside support. On geopolitical news, The US shot down an Iranian drone adding to the already negative sentiment stemming from stalled US-China trade talks and leaving oil prices lower. With declining oil prices weighing on the FTSE’s oil majors and a surging pound limiting the index’s upside, the only support may come from a reaction to yesterday’s ramped up rate cut expectations following Fed member John Williams’s speech.
The FTSE traded below the 20-period MA around 7530 and recorded a low of 7482 before ending at 7493. The index failed to find support at 7500 indicating that further weakness is in store with a break below the 7480 level required to drive the FTSE towards the lower support at 7450. Meanwhile, look to the 20-period MA to provide dynamic resistance on what seems to be an extended pullback on the FTSE’s wider uptrend with a break of the support at 7480.