The FTSE ended marginally higher as it rose by 0.12% on Wednesday as bullish momentum weakens. Today the index may see downside pressure arise from concerns over US-China trade progress as news suggest that the phase one deal may not be signed as soon as markets were expecting due to a lack of agreement on tariff conditions. Apart from trade headlines, the FTSE may take direction from the BOE’s monetary policy meeting today which is expected to leave interest rates unchanged due to political uncertainty in the UK. Thus, the focus will shift to inflation forecast which is expected to be trimmed thereby supporting the case for a rate cut. Any indication of such a scenario would lead the pound lower which may in turn buoy the FTSE.
The FTSE closed 8 points higher at 7396 on Wednesday. The price found buying pressure at an intra-day low of 7363 and edged higher to meet the 7400 level with resistance. Until we see a break above the 7400 level, the FTSE is likely to consolidate with a break below 7360 required to signal short-term weakness and target the lower level at 7350 followed by 7325. On the other hand, A break above 7400 is required to target the 7440 resistance level which separates the index from a more bullish outlook.
Resistance: 7402 /7440