The FTSE was the under-performer amongst European indices as it fell by 0.73% on Wednesday. Higher iron ore prices weighed on the index’s mining sector, while a rise in the sterling dragged on the index’s exporters. Separately on economic data, the Eurozone and Germany posted dismal manufacturing PMI figures which reaffirmed the region’s economic slowdown and boosts expectations of rate cut from the ECB monetary policy meeting today. The ECB’s interest rate decision is likely to have an influence on the day with a rate cut required to underpin global equities. Moreover, corporate earnings out of Europe should also impact price action during the day.
The FTSE lost 55 points on Wednesday as it dipped to the support at 7475 before ending at 7501. Despite the sharp fall, the index continues to trade within a familiar range of 7590-7470. The daily RSI reading is seen trending lower and is currently at the 50-midline separating the FTSE from negative territory. Look for a sustained move below the 20-period Ma at 7530 to indicate selling pressure while a break below the support zone of 7475/7470 is required to drive the FTSE lower. Alternately a move above 7530 would indicate buying pressure and lead the FTSE towards resistance at 5750 followed by 7590.