FTSE Technical Outlook: Lifting from Support Ahead of BoE
FTSE Technical Highlights:
- FTSE decline held bottom of 7600/550 support zone
- Support is support until it isn’t, but upside may be capped
- BoE tomorrow, if a market-mover likely FTSE moves opposite GBP
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On the heels of more trade war news out of Washington the FTSE found sellers yesterday along with other global markets, but found support just under 7550 and ended the day relatively unscathed. By comparison, the Nikkei dropped nearly 2%, the DAX over 1%, and the S&P 500 by 40 bps.
The area from 7600 down to 7550 had a question mark on it as the market declined into that zone given its seemingly lost relevance since acting as major resistance from June to November. But by seeing yesterday’s decline halted and today’s lift it shows it’s remains a zone of importance – it stays on the board.
Where could we go from here? Unfortunately, as we discussed last week, equity indices in general are a bit of a mystery right now while other markets (FX, commodities) are showing more trend clarity. The FTSE could continue to bounce back-and-forth between yesterday’s support and the area in the upper-7700s.
Tactically, the market isn’t presenting a good directional opportunity, but for those looking to fade levels then you have some relatively steadfast support and resistance levels to look to.
Heads up: We have the BoE tomorrow and while not expected to be a major volatility event, keep an eye on GBP – the FTSE is likely to move opposite the currency should a strong directional move develop. For live coverage of the BoE, you can join my colleague Martin Essex starting at 10:45 GMT time.
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FTSE Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.