Stocks in London on Wednesday are seen pulling back slightly from Tuesday's gains ahead of a meeting between European Commission President Jean-Claude Juncker and US President Donald Trump. Today the focus will switch to the more worrying scenario of a US–EU trade war, which, under a worst-case scenario has the potential to spark a crisis, if not a full-blown recession. Trump raised import duties on steel and aluminium products and threatened a similar move against Europe's automotive sector, which would carry far greater consequences. In London company news, telecommunications giant Vodafone said first-quarter trading was in line with expectations as it reported a fall in revenue.
The FTSE100 attempted to break the 7705 resistance level yesterday however this only lasted a few hours and by the end of the trading session, the price was back in the range and below resistances. For today, although the index still trades comfortably above its 100-period MA, the RSI signals a bearish move therefore the expectations are a slight drop to retest the moving average with a chance to go all the way to the support level at 7625 before the upside resumes.
Support: 7625 7575
Resistance: 7705 7777