The FTSE ended 0.65% higher on Friday at the back of a shift in sentiment towards the US-China trade war. President Trump provided markets with a glimmer of hope as he claims that a deal with China remains possible. In the UK, PM Theresa May announced her imminent resignation to which the FTSE may have not derived as much support as it had from trade hopes given its internationally exposed constituents. Today holidays in the US and UK alongside a lack of economic data should result in low-volume trading and may see the FTSE cautiously carry Friday’s optimism into the day.
The FTSE managed to recover off of its low at 7200 to end at 7277 on Friday. The price should find resistance around the 20-period MA around 7310 which should determine near-term direction and make room for gains should it broken. Short-term upside could occur should price manage to hold above the 7270 level, however a break above 7370 would be required to bring back a bullish outlook. Alternately, a failure to sustain price action above 7270 would negate chances of testing resistance at 7310 and drive the index lower with initial support at 7240 followed by 7200.
Support: 7240/ 7200
Resistance: 7310/ 7340