Futures indicate the FTSE 100 index to open 105 points higher at 7085 after closing around 60 points lower last Friday at 6980. This opening gap is caused by the US and Chinese presidents agreeing to a temporary truce in the clash between the world's two largest economies. As part of the deal, China will increase its purchase of American farm produce, energy and some industrial goods so as to reduce the trade deficit between the two countries. And the US will stop imposing additional tariffs on China. Looking ahead to the rest to the day, we have the manufacturing PMI from the UK at 0930 GMT.
The Footsie closed Friday slightly lower at 6980 but prices are seen opening this morning at 7085 slightly above the resistance line at 7080. However, even though the stock index shows strength in the short-term, prices are still trading below the 200-period moving average on the 4H chart and the failure to close above that line will most probably bring the bears back.
Support: 6955 / 6850
Resistance: 7080 / 7188