A weaker global economic outlook largely attributed to the US-China trade war prompted a decline in global stocks on Wednesday. The FTSE posted a sharp loss of 1.17% as a global bond rally continued amidst fears of escalating trade tension as China considers retaliatory measures against the US. Meanwhile the Eurozone’s economic outlook remains gloomy evident in the sudden climb in Germany’s unemployment data and the persisting uncertainty of Brexit and its negative impacts on the British economy. The main catalyst however, remains US-China trade headlines which will be monitored as they sway market sentiment and global growth outlook.
The FTSE breached the 7200 level of support to reach the notable support of 7150 before ending at 7185. A subsequent break below 7150 would provide us with a wider bearish development and bring into view the support at 7080. Look for a sustained move above 7215 to indicate a short-term potential recovery towards resistance at 7240, while holding below 7215 would maintain selling pressure and keep the FTSE ranging before we see a break below 7150 drive price towards the lower support at 7120 followed by 7080.
Support: 7150/ 7080
Resistance: 7215/ 7240