The FTSE 100 is struggling and momentum is dropping further with no edge being handed to either bullish or bearish traders. The healthcare sector with Hikma Pharmaceuticals PLC is the biggest drag on the FTSE 100, as the firm reports that their new product is not selling as expected.
We think it’s fair to expect further sideways trading for now. The low of 6255 seen on 14th October is acting as a support, while the high of 6487 seen on 23rd October is capping price. A break of 6255 may trigger a decline to 6182, while a break of 6487 may trigger a rally to 6600.
U.K. manufacturing PMI printed 55.5 vs. the 51.3 expected. This is a truly strong reading, however, with most of the FTSE 100 gains soured from aboard, this reading has not made a lasting impression on the FTSE 100. Chinese Caixin Manufacturing PMIprinted 48.3 vs. the 47.6 expected, a clear trend break suggesting higher PMI readings ahead. New orders also leaped higher, helping to support this view.
Key data on tap today is U.S. ISM Manufacturing, which may slip below 50. The markets anticipate a reading of 50, while we estimate the print to be 49 – this would suggest the U.S. 4Q GDP will remain soft and we may break the low of 6255 seen on 14th October. If this happens, we may reach 6182 (50% correction to the bullish leg from the September low of 5872).
Upcoming Risk Events (GMT)
- 14:45 Markit Final U.S. Manufacturing PMI, est.54
- 15:00 Construction Spending MoM, est.0.5%
- 15:00 U.S. ISM Manufacturing, est. 50
- See Economic Calendar
FTSE 100: Waiting For A Break To The 6255-6487 Range
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst
To contact Alejandro Zambrano, e-mail azambrano@dailyfx.com
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