Will Easing Trade Tensions and More Supportive Central Banks Boost FTSE to 7460?
Fiona Cincotta June 10, 2019 3:11 PM
After jumping higher in early trade, the FTSE has manged to hold onto its gains.
After jumping higher in early trade, the FTSE has manged to hold onto its gains. Boosted by a trade truce between US and Mexico, the prospect of greater central bank globally and a weakening pound the UK index is making an attempt to break through resistance at 7375.
Pound struggles as UK economy slows
Dismal monthly GDP data, in addition to weak manufacturing and industrial production numbers laid bare the impact of Brexit uncertainty and trade tensions on the British economy. Whilst the monthly GDP tracker is volatile and we say that one bad reading doesn’t constitute a trend, two consecutive readings of contraction are hard to ignore. The data suggests that the UK economy is facing a marked slow down in the second quarter. The pound dropped to a weekly low of $1.2654. Whilst it has picked up marginally in the afternoon session, we expect pressure to remain on the pound as the Conservative leadership battle heats up. With nominations formally opening today, investors will get a first look at how popular pro- Brexit candidates are. This could in fact spook investors further.
FTSE levels to watch:
The FTSE is trending higher trading above it 50, 100 and 200 sma on 4-hour chart; a bullish chart. The index is currently testing resistance at 7375. A breakthrough at this level could see the index extend gains to 7420 and up to 7460. On the downside support can be seen at 7260 before 7190.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.