FTSE 100 rebounds on early trading after yesterday’s sharp loses as the turbulence in oil markets spilt over into risky assets across the globe. Even gold was under selling pressure as the rout in commodities sparked deflation fears.
The UK consumer price inflation fell to 1.5% in March in line with expectations, from 1.7% in February. Lower cost of raw materials as the crude oil price drops to 20-year lows pressured prices in almost all consumer products. Low inflation figures help consumers to spend more, but the current combination of low inflation and lower oil prices signals a steep recession. Yesterday’s the UK’s employment figures came better than expected.
Gradual opening in some European countries supports sentiment, while the confirmed coronavirus cases dropped today in the UK and Germany.
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FTSE 100 Support and Resistance
FTSE 100 is 1.27% higher at 5713 as the consolidation between 5,600 and 5,800 continues for the sixth consecutive session after the correction from monthly highs. The technical picture for the FTSE 100 index is bearish, but a move above the 5,900 the recent high might give bulls the upper hand.
On the upside, first resistance for FTSE 100 stands at 5,716 the daily high. The next hurdle for the index is at 5,814, the high from yesterday’s trading session. If FTSE breaks above 5,814, the next supply zone will be met at 5,900 the high from April 14.
On the contrary, the first support for FTSE stands at 5,641 the daily low. If the FTSE 100 breaks lower, the next support area is at 5,580 the low from April 16 trading session. More robust support for the index would be met at 5,415 the low from April 6.
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