FTSE 100 Trades Below Critical Junction, Ahead of ECB Rate Decision
- The FTSE 100 rose on higher crude oil prices.
- The short-term price trend remains bullish above Monday’s swing low of 6261.
- The FTSE 100 trades below a critical junction.
- U.K. Retail Sales and the ECB rate announcement are on deck.
The FTSE 100 (CFD: UK100) was at the time of writing up by a few points from yesterday’s close as the index adjusted to overnight gains in Asian stock markets. Asian stock market gains were motivated by Crude oil prices rising to a new 2016 high over the last 24 hours on the heels of the weekly DOE U.S. crude oil inventory build being smaller than expected.
From a technical perspective, the FTSE 100 is at a critical and interesting junction. At the time of writing, the price was trading below a cluster of resistance levels, starting with the December high of 6447 and ending with the October 23 high of 6485.
However, beyond the October 23 high of 6485, there are no major resistance levels until the August high of 6760, which is a level that is 4.2% higher than the October 23 high.
The short-term price trend remains bullish given that Monday’s swing low of 6261 is higher than the April swing low of 6060, a low that in turn was preceded by the March 10 low of 6003. A short-term support level below Monday’s low is the April 11 low of 6162 followed by the 6060 low.
The U.K. Retail sales report is on deck today and a Bloomberg news survey projects it to rise by 3.8% YoY and for it to decline by 0.3% MoM. The report is important as a great part of U.K. GDP is made up of consumption.
The ECB rate meeting is also on deck and it is important as the U.K. trades a great deal with the Eurozone. Market participants are not pricing in the need for the ECB to deliver a policy change at today’s rate meeting, instead, the focus will be on guidance on future easing potential. In general, low-interest rates tend to help an economy to grow and given that a large part of U.K. exports are to the Eurozone, the ECB pledging to keep rates low is important for some FTSE 100 firms.
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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