The FTSE traded 1.02% higher on Monday fueled by hopes of economic stimulus measures from China and Germany provided relief amidst a slowdown in global growth. Meanwhile, the FTSE’s oil majors received a boost from higher oil prices following reports of an attack on a Saudi oil facility and rising geopolitical tensions. In the UK, a leaked document accounting for the prospect of a no-deal Brexit weighed on the pound. A continuous decline in the pound may help keep the FTSE afloat. While risk appetite improves on positive headlines and expectations of economic support, the global growth outlook remains bleak and uncertain in the face of the US-China trade war and Brexit. There are no major economic releases to impact price action on the FTSE which should leave trade headlines influencing price action and already cautious market sentiment.
The FTSE managed to trade above the 7150 level to reach the high of 7215 before ending at 7189 on Monday. The price responded to the divergence between price and RSI momentum as it extended its bullish reversal. Today, look for a sustained move above the 20-period MA near 7180 to indicate buying pressure and provide the FTSE with support to trade above the 7220 resistance to reach higher resistance levels at 7240 followed by 7280 before seeing a turn lower. Failure to hold above the 20-period MA would indicate selling pressure and lead the FTSE back down where support can be found at the 7150 level followed by 7080.