FTSE 100: Will The U.K. GDP Report Spur Life Into The Market?
- The intraday high of 6330 formed on April 22 is the most recent and significant swing high in the very short-term trend. A short-term support level is Monday’s low of 6248.
- Traders may have started to ignore short-term levels and instead focus on the longer term issues.
- U.K. GDP figures and Fed Rate Decision are out today.
This morning the FTSE 100 (CFD: UK100) maintained it is short-term bearish bias, which has been in place since mid-last week.
The intraday high of 6330 formed on April 22 is the most recent and significant swing high of a very short-term trend. The 6392 intraday high formed on April 21 precedes the April 22 high of 6330; hence, the trend is bearish.
A short-term support level is Monday’s low of 6248. A break to this level would also be the definite break to last week’s low of 6260. Price did try to breach last week’s low earlier this week but failed.
The next support level (below Monday’s low of 6248) is the psychological level of 6200. Below the 6200 support level, the April 11 low of 6162 comes into play.
Resistance levels are yesterday’s high of 6297, followed by the April 22 intraday high of 6330 and the April 21 intraday high of 6392.
As highlighted yesterday, the FTSE 100 maintains some of its bullish momentum, which started in mid-February. However, traders may have started to ignore short-term levels and instead focus on the big picture regarding price action. The first sign of traders not paying attention to short-term levels was the lack of bearish momentum following the FTSE 100’s slide below last week’s low earlier this week. Since Monday afternoon, the FTSE 100 has been choppy around the 6276 level.
If the big support and resistance levels are what traders are focusing on then the April 5 low of 6060 is the most critical support level, as it’s the most prominent swing low of the daily high. The November 11 high of 6461 is the most critical resistance level. The FTSE 100 spent two months last year trying to breach the 6461 level, which shows how important this high is.
U.K. GDP for the first quarter is on deck today and expected to rise by 2% YoY per a Bloomberg News survey. This would be slightly lower than the fourth quarter rise of 2.1%. Traders are looking forward to the report as it may provide some insight into whether Brexit fears have affected economic growth. Some economists say a sluggish growth figure means the BoE will keep rates low for longer.
This afternoon the Fed Rate Decision is deck and could affect the FTSE 100, for more on this, please see ‘Dollar and Equities Strategy Heading for Fed Decision’, by John Kicklighter, Chief Currency Strategist.
FTSE 100 | CFD: 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.