The FTSE outperformed European Indices as a declining pound helped bolster the FTSE to end 0.82% higher. The declines in the pound stems from disappointing UK economic data which revealed a weaker than expected manufacturing PMI figure on Monday and a sharp drop in the construction PMI figure on Tuesday. Moreover, sentiment remains buoyed by trade optimism as US-China talks are reportedly underway, however the recent threats made by the US to impose tariffs on the EU provides a reason to be cautious. Today the UK publishes services PMI data and continued weakness in the pound is likely to keep the FTSE afloat.
The FTSE gained 61 points to end at 7559 on Tuesday as a drop in the pound helped boost the index higher. The price reached a new peak of 7565 while the RSI reading has entered the overbought territory suggesting that a turnaround may be in store for the FTSE. Failure to trade above the resistance at 7580 would indicate bullish momentum has stalled and should leave price ranging above the 7530 level. Meanwhile, exiting the overbought conditions combined with a sustained move below 7530 should drive the FTSE lower to meet support at 7500 followed by 7470.