FTSE 100 trades higher today snapping a two-session losing streak. Investors cheered on signs that central bank of China preparing to boost stimulus in an attempt to support the Chinese coronavirus struggling economy. The People’s Bank of China (PBOC) cut the interest rate on its medium-term loans. Today’s report shows that there are 71,223 confirmed cases, 1,770 deaths, 10,699 in critical condition and 10,559 patients have recovered. Doubts raised among investors community as to whether China authorities will be able to contain the outbreak of the coronavirus in the very near future.
The PBOC expects that China’s economy could be disrupted in the first quarter of 2020 as a result of the coronavirus spread, but the PBOC expects a sharp recovery once the virus is brought under control.
The coronavirus outbreak remains the critical point of uncertainty in the markets. A positive development for the markets would be if the coronavirus can be contained or if a medical cure can soon be introduced.
FTSE 100 is 0.25% higher at 7427 as the index looks trapped between the 50-day and 100-day moving averages. The FTSE index broke below the 50-day moving average last week but still is hovering above the 100-day moving average. The technical analysis outlook is neutral now for the short term while the renewed hard Brexit fears would weigh on stocks.
On the upside, first resistance for the FTSE 100 stands at 7,450 the daily high. The next resistance for the FTSE 100 index is at 7494 the 50-day moving average. The high from January 27th at 7,585 would be the next supply zone.
On the downside, initial support for the index stands 7409 the daily low. If the FTSE 100 index breaks below, the next support area for the FTSE 100 is at 7380 the 100-day moving average. A break below will give bears the upper hand.