FTSE 100 trades 0.20% higher at 7624 as concerns over the coronaryvirus outbreak in China ease. The coronavirus revived the SARS outbreak back in 2002 which killed over 800 people. Chinese government has confirmed 440 cases and nine deaths. There are also reported cases in US, South Korea, Taiwan, Japan and Thailand. Stocks took a hit on the chin yesterday amid the coronavirus spread in China. But as in the US-Iran war tension case the dips were bought.
Yesterday the UK jobs report came in above expectations. The U.K. employment grew by 208k in the three months to November with the unemployment rate steady at 3.8%. Increased hiring activity came with higher headline wage growth at 3.2% beating forecasts of 3.1%. The ILO Unemployment Rate came in at 3.8% in line with projections for November.
Now investors await the Bank of England later in January with confusing signals after dovish comments from several MPC members on one hand and positive economic data on the other hand. I believe that the flash PMIs release this Friday would be the catalyst for the Bank of England’s next move.
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FTSE 100 Technical Analysis
FTSE 100 is 0.10% higher at 7,616 as stronger economic data overwhelm the concerns about the coronavirus spread. The index managed to break above the 7600 mark after yesterday hit the lowest level the last two weeks at 7550. The technical outlook is bullish despite the two day correction.
On the upside, immediate resistance for the FTSE 100 index stands at 7,637 the daily top (a lower high from yesterday). The next resistance for FTSE 100 will be met at 7689 the high from January 17th. Above that, the 2019 high from July 30th at 7,727 is the next obstacle.
On the flip side, first support for the FTSE index will be met at 7,610 the daily low (higher low). If bears break that level the next support zone will be met at 7550 the low from yesterday trading session. The positive momentum might be cancelled if the index breaks below the 50-day moving average at 7,447.
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