FTSE 100 index started the day higher helped by the positive finish in Wall Street after the morning losses. Investors sentiment improves as more businesses reopen after the coronavirus crisis. PM Johnson will announce an easing of lockdown plan later this week, Spain and Italy easing restrictions, and California will follow suit on Friday. Markets ignored the escalation in tensions between the USA and China after President Trump warned on new tariffs to China as there is strong evidence linking the coronavirus to a laboratory in China.
Meanwhile, crude oil price trades higher for the fifth straight day on optimism that global demand will recover as more and more businesses reopen. FTSE 100 gets a hand by oil companies such as BP and Shell.
The UK Services PMI came in at 13.4, topping the expectations of 12.2 in April. UK car sales fall 97% in April to their lowest monthly level in the last 70 years, as factories and businesses closed due to the coronavirus outbreak. The Society of Motor Manufacturers and Traders reported only 4,000 new vehicles registration compared to 161,000 in April last year.
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FTSE 100 Technical Analysis
FTSE 100 is 1.83% higher at 5,858 close to daily highs and reaching the 50-day moving average. FTSE managed to break above the recent consolidation area (5,600 and 5,800) and above the 50-day moving average for just two days the previous week. The pullback on Friday drove the FTSE 100 back below the 50-day moving average cancelling the recent positive momentum.
On the upside, first resistance for the index stands at 5,857 – 5,866 the 50-day moving average and daily high. The next resistance for the FTSE is at 5,148 the high from April 30. If the index breaks above 5,148 the next supply zone will be met at 6,464 the high from March 9.
On the other side, the first support for the FTSE index stands at 5,753 the daily low. If the FTSE 100 breaks lower, the next support area is at 5,628 the low from April 21. More support for the FTSE index would be met at 5,412 the low from April 6.