The FTSE 100 gives back some of yesterday’s gains, yet this pullback will probably be used by trend followers to add to their bullish exposure as the trend is bullish above Friday’s low of 5913. Price may reach last week’s high of 6066 as long as the low is respected.
A break to last week’s high at 6066 should trigger further buying and may lift price to the February high of 6130.
On a failure of Friday’s low at 5913 the short-term trend will turn bearish, and traders will probably aim for the February 15 low at 5804. Something which this week’s soft PMI report calls for.
Bearish Case Has Strengthened
January PMIs for the U.S., Eurozone, and Japan disappointed and points towards a slowdown at the start of the year.
The Markit PMI Manufacturing for the U.S. declined to 51 from 52.4, for the E.U. to 51 from 52, and Japan to 50.2 from 52. While this morning German IFO expectations index declined to 98.8 from 101.6.
This soft data should be enough to send the FTSE 100 lower on a break to Friday’s low at 5913, but for now traders are ignoring these reports.
Data on Tap Today
U.S. Consumer confidence, Richmond Fed and Existing Home Sales are on deck today, however I don’t think they will alter the overall trend of the FTSE 100. See our economic calendar.
See the DailyFX Analysts' 1Q forecasts for the Dollar, Euro, Pound, Equities and Gold
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
Struggling with Trading? Join a London Seminar
