FTSE 100 May Be On Verge Of Trading Higher

Talking Points

• The FTSE 100 has remained rangebound since Friday’s better than expected Non-Farm Payrolls, and now looks ready to trade higher on the back of this.
• We will continue to watch the high of 6011, as a break to this level may suggest that the trend has turned bullish
• Chinese trade data published overnight adds a bit more of a bullish feel to the market

Losing Money Trading? This Might Be Why

The FTSE 100 has stabilised after last week’s slide and is now trading below its Non-Farm Payrolls’ high of 6011. A break to this level may trigger a rally to the January 5 high of 6164, with this week’s low of 5847 potentially turning into a multi-day low. We note that the NFP outcome was 293K vs. 200K forecasted by Bloomberg, and that the FTSE 100 has so far not taken this into account. For the trend to turn bearish, a break to this week’s low of 5847 is needed.

Chinese trade balance published overnight rose to 382.05bn CNY vs. the 338.80 expected, while exports rose by 2.3% YoY (CNY) vs. a -4.1% expected. Imports declined by -4% YoY vs. the -7.9% expected. This adds a bit of a bullish feel to the market with some economists stating that it’s the last few months of softer Chinese Yuan which is spurring the better numbers, while others are maintaining that it’s too early to know if this momentum will be able to be sustained.

Data on tap this morning is E.U. Industrial production which is expected to rise by 1.3% YoY (WDA). A better than expected reading may add to the bullish sentiment. The Fed’s Beige Book is also on tap this evening. See our economic calendar.

FTSE 100 | FXCM: UK100

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

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