FTSE 100 jumps to six-month highs as investors increase bets that the Bank of England will proceed with a 25 basis point cut in the January policy meeting. The weaker UK retail sales add to the dovish sentiment. The UK Retail Sales, month over month, came in at -0.6%, below forecasts of 0.7% in December, the yearly reading came in at 0.9% also below estimates of 2.6%. Retail Sales ex-fuel (year over year) came in at 0.7% below expectations of 2.9%. Above that the previous figure of -0.6% revised down to -0.8%.
InvestingCube's S&R Levels
The stock rally boosted by the signing of phase one trade deal between China and the USA. China agreed to buy 200 billion of US products and services as well to impose tighter rules on intellectual property. President Trump said that the existing tariffs on Chinese imports would remain in place until the second phase of a deal had been agreed, probably after the US election.
FTSE 100 is 0.81% higher at 7,671 as the bullish momentum both fundamentally and technically drives the index, making higher highs the last two weeks.
On the upside, immediate resistance for FTSE stands at 7,676 the daily high. A convincing break above might test then the next resistance at 7,727 high from July 30th 2019. We have to go back to August 9 2018 top to find the next resistance level at 7,780.
On the downside, initial support for the index stands at 7,609 the daily low. In case the FTSE 100 settles today below that level the next support zone will be met at 7,524 the low from January 8th. What can change the recent bullish momentum for the FTSE 100 index is a break below the 50-day moving average at 7,432.