The FTSE rose by 0.59% due to renewed trade-optimism and a declining pound. The pound dropped on weaker than expected UK economic data that showed a drop of 0.4% in April’s GDP figure and contraction in manufacturing production, which in turn aided the lift in the FTSE. Moreover, support was found on global trade front as the US suspended tariffs on Mexico and provided some relief against President Trump’s tariff threats on China. While trade headlines will continue to dictate sentiment, the pound is likely to remain under pressure and keep the FTSE afloat amidst weaker economic data and uncertainty over Britain’s political landscape.
The FTSE managed to extend gains towards the resistance at 7370 before ended above it at 7375 on Monday. Holding above yesterday’s closing price would maintain buying pressure and target the resistance at 7400 which would clear the bulls’ path towards 7470. However, the RSI reading has approached the overbought territory and suggests that the index may turn lower to stall the rally and find immediate support at 7330.
Support: 7330/ 7290
Resistance: 7400/ 7470