FTSE 100 is up by more than 1.15% as traders look ahead to the relationship between the US and the UK. The market is also eying key economic numbers from the UK and important corporate earnings scheduled for later this week.
US and UK relations
The UK and the US have a long history of having strong political and economic relationship. Indeed, the two countries did trade worth more than $132 billion. That makes the US one of the biggest trading partner for the UK.
In recent months, teams of the two countries have been hammering out a post-Brexit deal between the two countries. Analysts will now be watching out for how these talks will proceed now that the US has a new president.
While Boris Johnson and Biden have a different take on many issues, analysts believe that the two sides will reach a deal in the next few months. That will be a positive thing for the FTSE 100 because most of its constituent companies have a lot of business in the US.
Key earnings ahead
The FTSE 100 is also rising as traders wait for earnings from key companies in the UK. This week, we will receive quarterly results from some key companies in the country. iTV, the former member of the blue-chip FTSE index will release its earnings this week. In this report, analysts will be watching out for the performance of its advertising business.
Burberry, the luxury group, will release its results on Thursday this week. Analysts will be watching out for the company’s performance after its revenue dropped by 49% in the first quarter. Notably, they will be watching out for its performance in China, the leading luxury market in the world.
Other key FTSE 100 companies to watch out for will be Weatherspoon that will release on Wednesday and WH Smith and National Grid that will publish their results on Thursday. The market will be also focusing on homebuilders like Taylor Wimpey and Persimmon that will publish a trading update on Thursday and Landsec that will publish on Tuesday.
In addition, the FTSE will react to important economic numbers from the UK, including employment numbers and Q3 GDP data.
FTSE 100 technical outlook
On the daily chart, we see that the FTSE 100 has been on a strong uptrend since October 30, when it fell to a low of £5483. Indeed, it has risen in the past eight consecutive days. Today’s jump is significant since it has seen the index move above the upper side of the descending channel. It has also moved above the 38.2% Fibonacci retracement. (This retracement joins the highest and lowest levels this year.)
Therefore, this movement is an indication that bull have prevailed, which means that they will now target the next resistance at £6,000. On the flip side, a move below the 25-day and 15-day moving average at £5,800 will invalidate this trend.
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FTSE index technical chart
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