FTSE 100 Rally Continues After the Christmas Holidays
FTSE 100 started the session in the positive foot after another record close from Wall Street indices yesterday, after President Donald Trump said he and President Jinping would hold a signing ceremony, for the Phase 1 trade deal. On the data front, the initial jobless claims came in at 222,000 for the week ended December 21st, which was in line with analysts estimates. The employment in the U.S. seems to be in good shape, which supports the positive mood in equities.
FTSE 100 rallied over 450 points after the UK general elections gave the Conservatives a clear victory and opened the way for the Brexit. GBPUSD weakness also helps equities as most of the companies included in the FTSE 100 index derive their earnings from international trading.
FTSE 100 trades at five-month highs as the bulls are ion full control of the index. A warning sign for bulls is that the FTSE 100 has reached overbought levels as the RSI 14 index indicates.
Traders should be cautious at current levels despite the positive momentum. On the upside, immediate resistance for FTSE 100 stands at 7,665 the daily high. The next supply zone for the index will be met at 7,725 the high from July 30th. We have to go back to August 9th 2018 to find the next resistance at 7,775.
On the other hand, immediate support for FTSE 100 stands at 7,622 the daily low. Next critical support will be met at 7,561 the low from December 23nd. In case the FTSE 100 bears break below, bears will target the 50-day moving average at 7,342.