FTSE 100 Trades Lower, GBPUSD Higher on Weak GDP Data

FTSE 100 trades 0.02% lower at 7,165 as confusing Brexit headlines crossing the wires. GBPUSD is trading 0.26% higher at 1.2236 trapped in narrow trading range. Equity investors are cautious ahead of this today’s trade talks between China and US. The negotiations are starting later today, ahead of an increase in U.S. tariffs on $250 billion worth of Chinese imports, to 30% from 25% on 15th October 2019. The tone of trade improved earlier, driven by better headlines saying that China is prepared to negotiate a partial trade deal in the meeting. Last week the U.S. Government announced tariffs on $7.5 billion worth of European exports from cheese to whisky.

Weak macro data released earlier; the United Kingdom Gross Domestic Product (month over month) came negative at -0.1% below forecasts of 0% in August. The UK Manufacturing Production (month over month) came in at -0.7% below expectations of 0% in August.

In its financial policy committee meeting minutes released yesterday the Bank of England (BOE) said that UK financial system is prepeared for Brexit. Brexit uncertainties weighing on UK economy and US-China trade tensions pose biggest near-term risk to global economy.

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FTSE 100 Support and Resistance

On the technical side, FTSE 100 consolidation pattern continues for the week, above seven-week lows amid confusing Brexit headlines and hIgh volatility in GBPUSD. On the downside, immediate support stands at 7,130 today’s low, while a break below will open the way for a test of 7,027 the August low. Below this level, the next support comes in at the lows seen on February 2019,  at 6,966. On the upside the index facing the resistance at 7,185 daily high and then at 7.249 the 200-day moving average, a close above could open the way for a move up to 7,338 the 100-day moving average.

European indices trading higher today, Dax 30 is 0.15% higher at 12,112 the CAC 40 in Paris trading 0.34% higher at 5,518, In Milan, the FTSE MIB is 0.13% lower at 21,505. In Wall Street, the Dow Jones futures trading 0.06% lower at 26,286, the S&P 500 futures are 0.04% lower at 2,917 while the Nasdaq futures are 0.01% lower at 7,698 signalling a negative start for equities in the other side of the Atlantic.