FTSE 100 extends gains recovering most of March losses as optimism about the reopening, and a V-Shaped recovery of economies overshadow the rising tensions between USA and China. The US secretary of state noted that the USA no longer saw Hong Kong as autonomous after China’s plans to introduce a new national security law.
Bank of England member Michael Saunders said the central bank should expand its asset purchase program to offset the damage to the UK economy from the coronavirus crisis.
Cineworld Group (CINE) is 24% higher as it plans to reopen all its cinemas in July and secured $110 million from lenders to help it survive the coronavirus crisis.
Lloyds Banking (LLOY) retreat today after yesterday’s rally, giving up 0.58% at 31.63, Barclays (BARC) on the other hand continues higher adding 2.29% at 122.53, Royal Bank of Scotland is 1.08% lower at 118,83, and Vodafone (VOD) is 2.33% higher at 134.45.
Rolls Royce Holdings is 8.09% lower at 318.15 after AKO Capital disclosed it sold its 5.2% stake in Rolls-Royce.
In Wall Street the major indices continue higher for one more day despite the United States Initial Jobless Claims registered in at 2123K above the expectations of 2100K in May as the layoff in the USA continues. The 4-week moving average was 2,608,000, a decrease of 436,000 from the previous week’s revised average The US jobless claims have risen to 40 million since the lockdown.
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FTSE 100 Technical Analysis
FTSE 100 is 1.22% higher at 6,219 a level that we haven’t seen since March 10 as the index continues higher for the third consecutive session. FTSE positive momentum extends above the 50-day moving average targeting the critical resistance at the 100-day moving average. Meanwhile, indices in Wall Street yesterday managed to break above the 100-day moving average. The technical picture remains bearish for the long term despite the recent rally. Only a break above the 100-day moving might cancel the bearish momentum.
On the upside, first resistance for the pair stands at 6,234 the daily high. More pressure will emerge at 6,453 the 100-day moving average. In case of a break, higher bulls will be in control, and an attempt to 6,707 the high from March 6 would be possible.
On the flipside, immediate support for the FTSE index will be met at 6,144 the daily low. Below that next support zone stands at 5,985 the low from May 26. If the sellers break that level, then the next support is at 5,897 the low from May 22.