The FTSE traded 0.33% higher on Wednesday ahead of the anticipated FED monetary policy meeting which delivered a rate cut however suggested that there would be no further monetary policy easing in the near-term future. The news strengthened the pound against the greenback while an unlikely no-deal Brexit departure further supports the domestic currency which may limit the upside potential on the FTSE. Given that Brexit developments are on pause until the prospect of a general election is fully legislated, markets will look to trade developments as US and China have yet to finalize their phase one agreements. Separately on economic data, China’s economy, which FTSE’s mining members count on, showed manufacturing activity came in weaker than expected in October and may add downside pressure to the index.
The FTSE erased its losses from the previous session as it closed 25 points higher at 7330 on Wednesday. The price held above the support at 7280 however remained below the resistance at 7340 to maintain range-bound price action. Today look for a sustained move above the support zone 7280/7290 to maintain range-bound-price action until a break above 7340 signals a bullish continuation toward the resistance at 7370 and 7400. Failure to do so will lead the FTSE lower with a sustained move below 7280 required to target the lower support level at 7250 followed by 7220.
Resistance: 7340 /7370