FTSE 100 Looking For Direction After Strong UK CPI Data

FTSE 100 starts the session muted after UK inflation jumped in July surprising investors. The United Kingdom Consumer Price Index climbed at 1% beating the forecast of 0.6%. Inflation jumped mostly on higher prices in shoes and clothes. Personal protective equipment and higher petrol prices also contributed to the sharp rise in inflation.

UK Core CPI at 1.8%

Core Consumer Price Index (CPI excluding food, energy, tobacco and alcohol) registered in at 1.8%, above the expectations of 1.3%. The Retail Price Index registered in at 0.5% topping the expectations of 0.1% in July.

Wall Street continues to boost investors sentiment as Nasdaq and S&P 500 hit record highs yesterday after better than expected quarterly earnings from the major U.S. retailers. Asian indices mirrored Wall Street and finished mostly higher despite weak economic data from Japan.
Investors waiting later on the day the release of the minutes of the last Fed’s policy meeting for fresh clues on the economic outlook and the future interest rates move.

The session started with strong volumes in Lloyds, which is 0.59% higher at 28.39, BP is 0.71% lower at 281.37, Barclays is 0.07% higher at 108.26 while NatWest is 0.80% higher 113.13.

FTSE 100 Analysis

FTSE 100 is 0.12% higher at 6,083 as the index looks trapped between the 50 and the 100-day moving average. In the opening today the index tested the 100-day moving average and bounced. Yesterday, FTSE 100 tested the 50-day moving average and retreated, so investors are indecisive at current levels and have to wait for a clear signal before initiating a trade. 

Bullish traders have to wait for a break above 6,155 the 50-day moving average. The next obstacle for the FTSE is at 6,280 the high from August 13. More selling pressure would be met at 6,324 the high from July 21. 

On the other side, support stands at 6,030 the 100-day moving average. Sellers would take control below that level, targeting 5,857 the low from August 3. More bids would emerge at 5,799 the low from May 18. 

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FTSE 100 Daily Chart

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