The Footsie index posted its first loss of the week as it fell 0.53% on Thursday. Whilst uncertainty lingers over US-China trade progress and Brexit’s course, The ECB’s policy meeting painted a gloomy picture for the world economy with its decision to pursue policy measures to stimulate Europe’s slowing economy and a delay in rate hikes until next year. With lack of clarity on the trade front and economic concerns on the rise, as growth estimates for the UK and Eurozone were downgraded, bearish sentiment may prompt further declines in the FTSE.
The FTSE failed to extend gains past the resistance zone of 7220 and reversed this week’s upside move to end at 7157. While the trend line support on the index remains intact, price would have to break through resistance at 7220 to signal a retest of the peak at 7260. Alternately, a break through the 20-period MA around 7130 would be needed to prompt further declines in the index towards the support at 7060 .
Support: 7130/ 7060
Resistance: 7260/ 7310