The FTSE broke its streak of gains throughout the week on Friday as it declined by 0.63%. News reports that President Trump denied claims of removing existing tariffs on China robbed the bulls of their strength and weakened trade optimism. Today the UK publishes its third quarter GDP figure which is expected to show a rise of 0.4% against a contraction of 0.2% in the second quarter. Moreover, it will release manufacturing and industrial production data for September both of which are estimated to show an improvement. On UK politics, the general election campaign is underway and Brexit uncertainty persists as the outcome remains indefinite. Traders should look to price action on the pound to possibly have an effect on the FTSE however trade sentiment is likely to overshadow the stats.
The FTSE declined from its high at 7430 by 47 points to end at 7359 on Friday. Today look to the 20-period MA at 7360 to determine direction. A bounce off of this level coupled with strong momentum would lead the FTSE to test the resistance at 7440. A break above 7440 would bring about a strong bullish development. Failure to hold above the 7360 level would signal further weakness and target the lower levels at 7320 and 7300 near the 50-period MA.
Resistance: 7400 /7440