FTSE 100 rises sharply in early trading on hopes of a potential coronavirus treatment from Gilead. Sentiment also supported by President Trump’s plan to gradually reopen the economy sooner than expected. Meanwhile, the dismal economic data continues.
China reported that the economy shrank for the first time since 1992. The GDP contracted by 6.8% in the first quarter of the year compared to a 6% expansion in the final quarter of 2019. China’s industrial output fell 1.1% in March compared to a year earlier, which was above the 7.3% drop expected. Retail sales were down 15.8% in March versus the expectations for a 10% drop, while fixed-asset investment slide 16.1% year-on-year compared to forecasts of a 15% drop.
Oil companies rally in early trading after crude oil price managed to break above the $25 mark as major producing countries agreed on a deal to cut the oil production by 10 million barrels per day.
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FTSE 100 Resistance and Support
FTSE 100 is 2.42% higher at 5765 as the rebound from the March lows is intact. The technical picture for the FTSE 100 index remains bearish, while the recent high at 5900 might attract a new wave of sellers. What can cancel the negative momentum is only a break above the 50-day moving average at 6245.
On the upside, initial resistance for FTSE 100 stands at 5,812 the daily top. The next hurdle for the index is at 5,889 the high from April 14 trading session. If the FTSE index breaks above 5,889 the next supply zone will be met at 6,078 the high from March 11.
On the contrary, the first support for the index stands at 5,628 the daily low. If the FTSE index breaks lower, the next support area is at 5,580 the low from yesterday’s trading session. More support for the index would be met at 5,415 the low from April 6th trading session.
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