FTSE 100 slide in early trading despite the retail sales showed improvement for the fourth straight month as the recovery continues after the easing of lockdown. Retail sales rose 0.8% in August above the expectations of 0.7%, and also increase 4% above the pre-coronavirus level. Online retail sales dropped 2.5% in August, but still, the volumes are 46% higher than February’s levels.
The Confederation of British Industry in it’s recent survey presented that nearly half the U.K. companies surveyed plan to reduce hiring or not hire at all over the next year.
Bank of England Review All Possible Tools
Bank of England yesterday kept the interest rates and its quantitative easing program unchanged as was expected by markets. The BOE said it needed more time to assess whether the economy needs more stimulus, after an improvement in the economic data. BOE said that they would continue to review all possible actions and also discussed the effectiveness of negative rates, which send the British pound lower. The central bank also warned that there is a risk of a more persistent period of elevated unemployment after the expiration of the job support schemes.
On the coronavirus front, new restrictive measures will be introduced in the north-east of England starting today, with bars and restaurants facing a curfew.
FTSE 100 Daily Analysis
FTSE 100 gives up 0.58% at 6,015 in early trading as the recent pullback continues for the third straight day. The index is moving away from the 100-day moving average, forming a bearish picture.
Support for the index stands at the 6,000 mark, which is low from yesterday’s trading session. More buying interest might emerge at 5,868 the low from September 8.
On the flip side, resistance for the FTSE 100 index is at 6,074 the 50-day moving average. The next hurdle is the critical resistance at the 100-day moving average at 6,098. If the index manages to clear that resistance then the target would be 6,175 the top from August 25.
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FTSE 100 Daily Chart
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