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FTSE 100 Index Outlook: Is 7,700 Possible Before EOY?

The FTSE 100 index is struggling to catch up to the global stock rally. However, the benchmark index of UK equities remains 6.5% below its yearly high of 8,047, which is also an all-time high. Recently, the index has broken above a diagonal resistance, which has the potential to transform into a bigger rally.

The CPI figures of October 2023 indicated a significant cooldown in UK inflation as the YoY inflation fell to 4.6% against the forecast of 4.8%. This was a major drop from the September CPI of 6.7%, which meant that the Bank of England was now less likely to raise interest rates in this year.

While the cooling down of inflation is surely a tailwind for the FTSE 100 index, inflation still remains far above the BOE target of 2%. Due to this reason, most investors are taking a cautious approach while investing in UK equities.

Technical analysis gives us even a better outlook as the index is currently respecting a downward trendline on a high timeframe. The following weekly chart depicts a breakout from the trendline. In case of confirmation of this breakout, the FTSE 100 index forecast will become fairly bullish.

FTSE 100 Index Chart
FTSE Technical Analysis