FTSE 100 Rises on Soft Eurozone PMI
- The FTSE 100 remains trapped in its 6053-6195 range.
- Markit Eurozone Composite for May declined to 52.9 from 53 and the FTSE 100 rose by 25 points just 10 minutes after the release of the report.
- No U.K. data is on deck today.
FTSE 100 trading was lackluster for trend traders at the time of writing, as price remained trapped between the May 6 low of 6053 and the May 12 high of 6195. The range will have kept price confined for four weeks this Wednesday unless a break occurs.
For a trend to emerge, a break to the above-mentioned range is needed and until this happens price will continue to remain range bound and lack a strong bias, making it difficult to trade. The only benefit to a ranging market, from a trend trading perspective, is the strong momentum, which tends to follow a break to the range.
Resistance levels above the upper end of the current range at 6195 are the May 17 high of 6217, the May 3 high of 6283, and the April 27 high of 6341. The nearest support levels below the May 6 low of 6053 are the March 10 low of 6006 and the February 24 low of 5843. At this stage, it is impossible to know which way price may break.
FTSE 100 | CFD: UK100
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
There are no U.K. data on deck this morning.
The Markit Eurozone Composite for May declined to 52.9 from 53, which is a softer reading than the 53.2 expected as per a Bloomberg Survey. As has been the norm over the last year, it is the Manufacturing sector which is suffering (the Manufacturing PMI declined to 51.5 from 51.7), while the Service sector is holding up (53.1 unchanged). Markit, the complier of the report, says that the lower PMI composite over the last two months suggests a slowing Eurozone GDP in the second quarter. They also highlight that new business growth slid to its lowest level since January 2015, which points towards soft growth in June. The FTSE 100 rose by 25 points just 10 minutes following the release of the report.
--- 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.