The FTSE traded 0.50% higher on Tuesday as President Trump claimed that the phase one deal with China would be agreed on soon. While his remarks may offer a semblance of certainty, the history of US-China relations proves to be uncertain which should leave markets in a cautious mode especially as President Trump renewed threats of additional tariffs. In terms of data, UK unemployment ticked lower to 3.8% while wages grew by 3.6% versus an estimate of 3.8%. Today, the UK releases inflation data for October and Fed Chairman Powell delivers a speech in which markets will seek further clues on future US monetary policy. Apart from the data, traders should expect trade sentiment to bear the strongest influence on the FTSE’s direction.
The FTSE gained 36 points to close at 7365 on Tuesday. The index extended its rebound to reach the resistance zone of 7390/7400 since it dropped to support at 7260 near the 200-period MA last week. Above the mentioned zone, the FTSE would target the resistance at 7440 which separates it from a strong bullish development. So far the index has maintained its uptrend with its sequence of higher lows and only a break below 7260 would impair the bullish outlook.
Resistance: 7400 /7440