London’s blue-hip index was the outperformer amongst European indices as it surged by 1.02% on Friday. A plummeting pound helped bolster the FTSE’s export members as a BOE policy maker raised expectations for a rate cut this year. Meanwhile, Brexit uncertainty persists and negatively impacts the UK economy which is to reveal its 2nd quarter GDP figure later today. On US-China news, the US administration revealed on Friday that it would restrict US financial investments into China thereby suggesting that the relations between the two nations haven’t progressed positively. Market participants should look to the US-China trade news which has continuously shifted sentiment to impact price action alongside Brexit developments. In addition, look to a lower pound to keep the FTSE afloat.
The FTSE traded 75 points higher to end at 7426 on Friday. The price managed to hold above the 7350 level and surged to meet the resistance at 7440. The daily RSI reading is within bullish territory and remains below the overbought area, indicating there is room for price to move higher. Look for a move below 7380 to indicate selling pressure and lead the FTSE to form a higher low on its uptrend since mid-August. A break below 7350 would lead the index to the lower support zone at 7300/7290. On the other hand, holding above 7380 would maintain the bulls’ control with a trade above 7440 required to signal a bullish continuation towards higher levels at 7465 and 7500.