The FTSE ended 0.31% higher on Friday as markets optimistically awaited further clarity on US-China trade relations at the G-20 summit. The two nations agreed to a trade truce and to resume trade negotiations which may see the FTSE exhibit a relief rally today as markets cheer for the avoidance of further tariffs and hope to see progress. However given that existing tariffs remain and weigh on global growth, without further US-China trade progress, it is only a matter of time before upside momentum exhausts. Today we should see risk appetite improve on trade optimism and drive the FTSE higher while manufacturing PMI figures out of the UK and the Eurozone should have a muted impact.
The FTSE gained a modest 23 points to end at 7425 on Friday as it remained below the trend line resistance off of the series of lower intraday highs. We will look for a break above the trend line and a sustained move above 7440 to indicate buying pressure and drive price to re-test the resistance at 7470. Overcoming the 7470 level would clear the path for further advances towards 7520 while declining below the 7400 level would suggest a lower move towards the support at 7370.