Equity markets bounced back yesterday as investors were encouraged to buy back into the market on the back of strong corporate earnings. Positive updates from Lloyds helped sentiment in the UK, but it is fair to say that the rally in the US dragged other markets higher too. Looking ahead, the FTSE100 is set to open lower today, as Asian markets were dragged down by a fall in US index futures. The UK corporate calendar on Friday has third-quarter results from Royal Bank of Scotland and British Airways.
The UK index closed above its opening price yesterday after recovering from early selling pressure. Prices are trading close to key technical resistance level at 6960. The RSI is below 30 suggesting that the momentum of the index is strongly negative in the short term also indicating increased pessimism and continued falling prices. However, low RSI may be a sign that the index is oversold and that there is a chance for a reaction upwards. The index is overall assessed as technically neutral for the medium long term.
Support: 6925 6865
Resistance: 6960 7050