The FTSE traded 0.63% lower as the attack on Saudi’s oil production facilities raises geopolitical tensions in the Middle East. As a result, oil prices surged and boosted the index’s oil majors. However, the news poses further headwinds, apart from the US-China trade war, on global growth. Today, there are no major economic releases from the UK to impact price action which will leave influence to stem from geopolitical headlines as further uncertainty hangs over global markets and maintains a risk-off mood. Traders should also take into account Brexit headlines as PM Johnson continues negotiations with EU leaders to ensure a Brexit deal however has seen no progress yet.
The FTSE lost 46 points as it traded below its high at 7380 and ended at 7321. The daily RSI reading continues to trend higher while the 4H RSI turned away from the overbought territory yet remains on the bullish side. Today, look for a sustained move below the support of 7300 to indicate a short-term pullback on the index and target the lower support at 7265 followed by 7200. The latter level separates the index from a bearish phase as a break below 7200 would negate the FTSE’s sequence of higher lows. While it is unlikely, a sustained move above 7350 would indicate buying pressure and a break above 7380 would be required to signal a bullish continuation.