The FTSE closed higher yesterday at 7,338.7 amidst surprisingly higher than expected UK inflation figures and an ongoing informal EU27 leaders' summit on Brexit. Higher than expected CPI figures for August-YoY, came at 2.7% vs. an expected of 2.4% and a previous of 2.5%, pushing bank stocks to the top of the FTSE as the market is confident that a rate hike is now imminent in May 2019 with a 2% inflationary target still in play. Miners also at the top of the index as US-China trade tariffs were weighed as softer than expected by the market, rendering metals as an attractive long term buying opportunity. In Brexit news, European Council President Donald Tusk is already urging the leaders to hold another talk in mid-November as PM May affirmed that her "Chequers" plan was "the only credible and negotiable plan on the table that delivers no hard border in Northern Ireland and also delivers on the vote of the British people". In today's upcoming news, GBP retail sales figures coming out 8:30 GMT, while the market eagerly awaits the EU27 negotiation results.
While the FTSE did hit our first resistance target set yesterday and confirmed it as a support, it failed to reach our RSI divergence target at 7353.4 showing signs of weakening bullish momentum as confirmed today by the RSI and MACD. Market correction is expected today with a possibility of a short term trend change if our uptrend is broken, with a further support level at 7126.7.
Support: 7309.5 7268.4
Resistance: 7335.9 7403.1