FTSE 100 edged lower in early trading but managed to return on the green ahead of the signing of phase one trade deal. Traders follow reports that existing tariffs on Chinese products will remain in place until the US Presidential election in November. China has committed to purchase an additional US$200 billion of Chinese products.
Traders are awaiting the release of UK CPI, the retail price and producer price inflation, due at 9:30GMT. The headline CPI is expected at +0.2% in December while the annualized figure is seen steady at +1.5%. The core inflation rate is expected at 1.6%.
In corporate news, the British government reached an agreement to save the Flybe regional airline. FTSE helped by Pearson plc 1.42%, Hargreaves Lansdown plc +1.41% and Burberry Group plc +1.01.
FTSE 100 is 0.12% higher at 7,633 as the bulls are in control of the index. The index is 1.22% higher in 2020 as the rally in equities around the world continues.
Bulls will meet the first hurdle at 7,635 the daily top. Positive CPI data later today might push FTSE to the next resistance at 7,668 the December 27th high. The next target for longs is at 7,727 the high from July 30th 2019.
On the other hand, initial support for the index stands at 7,609 the daily low. A break below might push the index to the next support zone at 7,524 the low from January 8th. A trend-changer might be a move below the 50-day moving average at 7,421.