The FTSE declined by 0.34% on Tuesday while the pound treaded higher as UK lawmakers voted for a general election in December. While the outcome of Brexit remains uncertain as the bill for a general election has yet to pass through the House of Lords, the recent developments may very well leave it in the hands of the British people. Today’s market moving event is the Fed’s monetary policy meeting and subsequent speech by Fed Chairman Powell. A rate cut is widely expected which will leave much influence to Powell’s tone on the economy’s state and future monetary policy moves. Ahead of the event, the US publishes ADP employment change and its 3rd quarter GDP figure which may impact direction on the FTSE during the day.
The FTSE closed 25 points lower at 7306 on Tuesday. The price drifted lower from the resistance at 7340 to meet the dynamic support provided by the 20-period MA at 7260. Today, look for a sustained move below the 7290 level coupled with a break below the 20-period MA to indicate selling pressure and target the support zone at 7250/7240 near the 50-day MA. Below this zone, price would find support at the 7220 level which separates the FTSE from further downside pressure. A sustained move above 7290 would be required to maintain buying pressure while breaching the resistance at 7340 would enable gains towards the higher levels at 7370 and 7400.
Resistance: 7340 /7370