The FTSE 100 Has Cracked Its March High

2016-04-13 07:27:00 Alejandro Zambrano, Market Analyst

Talking Points

FTSE 100 trades higher, in line with the rise in commodity prices.
The latest U.S. Retail Sales report is on deck today.
Chinese Exports increased 18.7 % YoY.

The FTSE 100 has at the time of writing finally breached the March 18 high of 6237, a resistance level which had capped price for more than a month.

The trigger behind the FTSE 100’s rise above the March 18 high, was gains in the commodity-related shares; the Materials Sector saw gains of 2.93% on the day, while Energy firms rose by 1.45%. These gains were in return triggered by stronger metal and energy prices.

The FTSE 100’s relationship with Brent crude oil prices was highlighted yesterday because, at that time, crude oil had risen above its monthly high while the FTSE 100 remained trapped in its narrow range.

With the FTSE 100’s breach to the March 18 high of 6237, the next resistance level ahead is the December 29 swing high of 6322, followed by the December 2 high of 6449. The trend defining level is the April low of 6060 as it’s the most recent swing low, and given that this low is greater than the swing low of March 3, the short-term trend is bullish.

The key report for the FTSE 100 on deck this afternoon is U.S. Retails Sales, which is projected to increase by 0.1% MoM according to a Bloomberg News survey. Traders watch U.S. data reports, not only because they impact the USD and could, therefore, impact the FTSE 100 via commodity prices, but because some studies show that 19% of FTSE 100 revenues are from the U.S. This can be contrasted with only 23% of FTSE 100 revenues being derived from the U.K.

Chinese data, published overnight showed that exports in CNY rose by 18.7% YoY vs. the estimated 14.9%. The business press cites this as positive for global stocks.

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FTSE 100 | FXCM: UK100