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FTSE 100 Retreat, AstraZeneca Lower On Merger with Gilead Rumors

FTSE 100 Chart

FTSE 100 starts lower the week after strong gains on Friday on enthusiasm over stronger than expected employment data from the USA that boosts the optimism for a fast global recovery. The unemployment rate dropped to 13.3%, the forecast was looking for an increase to 20%. U.S. Nonfarm Payrolls increased by 2,5 million, smashing the expectations of -8 million jobs loss. 

The U.K. is planning the reopening of restaurants and pubs on June 22 despite some health concerns about easing the lockdown to early and risking a second wave of infections. Travellers around Britain have to stay in quarantine for 14 days. Treasure announced that the big stimulus is delayed until autumn 

There are some questions on the U.S. jobless data released on Friday following a misclassification on the unemployment report due to difficulty to collect economic data during the extreme changes in the economy amid the coronavirus crisis. Some employees labelled as working but absent when they should have classified as temporarily laid-off, with that calculation the unemployment would have been at 16.3%. 

AstraZeneca and Gilead Sciences Merger Rumors

In corporate news rumours on the merger between AstraZeneca and Gilead Sciences attracts investors attention. AstraZeneca is under selling pressure as the initiator of the merger, and gives up 2.25% at 8,237. 

Lloyds Banking Group (LLOY) is 3.00 higher at 36.62, Vodafone (VOD) is 0.66% higher at 139.87, Barclays (BARC) is 1.64% higher at 133.52, Glencore is 0.86% at 182.51, and Tesco is 0.61% lower at 226.35.

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FTSE 100 Analysis

FTSE 100 is 0.32% lower at 6,463 as the index retreat from two-month highs on some profit-taking after the recent substantial gains. The index technical picture is bullish above the 100-day moving average. A move below that support line would cancel the bullish momentum. 

On the downside, immediate support for the FTSE 100 will be met at 6,423 the daily low. Next support area stands at 6,323 the 100-day moving average. If the sellers break that level, then the next support is at 6,223 the low from June 3.  

On the other side, the first resistance for the FTSE index is at 6,484 the daily high. The next hurdle stands at 6,708 the high from March 6. Next level to watch is the high from March 5 at 6,842.   

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