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FTSE 100 At Monthly Highs on Renewed Trade Optimism

FTSE 100
FTSE 100

FTSE 100 index adds 0.37% at 7,424.7 registering gains for fifth consecutive session making fresh monthly highs on renewed trade optimism after rumours that US and China agreed to cancel existing tarrifs and despite news yesterday the expected meeting between US President and Chinese President to sign an interim trade deal could be delayed until December as negotiations continue over the trade terms. On the data front, the United Kingdom Halifax House Prices (3m/YoY) came in at 0.9% below expectations of 1.4% in October, the monthly reading came in at -0.1%, below forecasts of 0.3% in October.

Earlier this week the UK Services PMI came in at 50, topping forecasts of 49.7 in October and above the previous reading of 49.5. The services sector in UK is the biggest contributor to GDP and the 50 print today indicates that the services sector has turned the momentum to positive and in the upcoming months might break above 50 that will signal expansion for the sector.

Investors expect Bank of England to stand pat on rates and continue the asset purchase programme as it is, in its policy announcement later today. UK heads to general election in December that increases the uncertainty for the short term but might clarify the political situation for 2020.

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FTSE 100 Technical Analysis

On the technical side, FTSE makes fresh monthly high today after the index tested the 50-day moving average at 7,255 in early November. The index formed a death cross pattern on October 10, as the 50-day moving average crossed below the 200-day MA giving a bearish signal for FTSE.

On the upside FTSE 100 facing immediate resistance at 7,427 daily high and then at 7,440 the high from September 27th. If FTSE 100 manages to pierce above convincingly could open the way for a move up to 7,580 the August highs.

On the downside, immediate support stands at 7,396.4 today’s low, while a break below will open the way for a test of 7,335 the 100-day moving average. Below this level, the next support target comes at 7.293 the 200-day moving average.

European equity indices also trading higher today, Dax 30 is 0.74% higher at 13,276 the CAC 40 in Paris trading 0.28% higher at 5,883, In Milan, the FTSE MIB is 0.71% higher at 23,537.

In Wall Street futures jumped on the news about the tariffs cancelation, the Dow Jones futures are 0.49% higher at 27,564, the S&P 500 futures are 0.39% higher at 3,087 while the Nasdaq futures are 0.48% higher at 8,246 signalling a positive start for equities in the other side of the Atlantic.More content