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FTSE 100 Slips Ahead Of Election

ftse 100
ftse 100

FTSE 100 trades lower despite the positive opening as investors wait for clues from the central bank’s meetings, today from Fed and tomorrow from ECB. On the election front latest poll shows a narrowing Boris Johnson lead. The Conservative majority now dropped to 28 seats from 68 seats, increasing the possibility of a hung UK parliament. The poll pushed GBPUSD lower and that is supportive for FTSE.

Trade negotiations between China and USA continue as we approach the December 15th deadline of the new tariffs to be imposed on Chinese products.

Negative Outlook for FTSE 100

FTSE 100 technical outlook is negative for the short term as the previous week correction broke below all significant daily moving averages. Yesterday in the daily chart FTSE formed a hammer pattern which might signal bullish reversal for the index.

Traders focus is on the downside, where the first support stands at 7,195 the daily low. A break below that level might push the FTSE 100 index for a test of yesterday’s low at 7,139 a level that successfully provided support the last two weeks. The October lows might be the next area of support around 7,063.

On the other hand, FTSE needs a close above the daily top at 7,150 that might signal an entry point for bulls in an attempt to the next resistance at the 50-day moving average around 7,271. If the index breaks above that resistance then a move up to the 100-day moving average will be the next target at 7285.