FTSE 100 sterted today lower after three consecutive positive sessions amid the monetary stimulus across the globe. Bank of Canada yesterday joined the Federal Reserve in slashing interest rates by 50 basis points. Investors sentiment improved amid speculation that Bank of England and European Central Bank would lower rates too. Coronavirus impact continues to weigh on risky assets as Italy decided to close all universities and schools in an attempt to stop the coronavirus spread.
The Bank of England’s next policy meeting is on March 26, and it will be chaired by the new Governor, Bailey. Investors leaning toward a rate cut, and after the Fed’s and BOC move, there is more talk of a 50 basis point interest rate cut.
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FTSE 100 Technical Analysis
FTSE 100 is 0.59% lower at 6772 as the index bounced from oversold levels the last three trading sessions. FTSE managed to rebound from the three month lows amid the interest rates cut from central banks. The technical outlook for FTSE is bearish and only a move above 7000 might cancel the negative momentum.
Lower levels are a possible scenario and the first support for the FTSE index stands at 6753 the daily low. If the FTSE index breaks below, the next support area is at 6693 the low from March 4th. A move below might open the way for the low from March 3nd at 6653.
On the upside, the first resistance for the FTSE index stands at 6,834 the daily high. The next resistance level for the index is at 6853 the high from yesterday’s trading session. A move above might test the next supply zone at 7044 the high from February 27th.
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