Can FTSE retake 7100?
The FTSE along with its European peers are pointing to a mildly stronger start, after an upbeat close on Wall Street.
US indices finished higher despite US CPI inflation hitting 5%. There were enough one off factors in the data for investors to believe the Fed’s position that the spike in inflation will be transitory.
UK GDP data revealed that the UK economy grew 2.2% in the three months to April as expected. GDP in April MoM rose 2.3% up from 2.1% in March but slightly below 2.4% forecast.
Where next for the FTSE?
After finding support around 7050, the 100 sma of the 4 hour chart earlier in the week, FTSE rebounded making a fresh attempt on 7120 in the previous session before easing back to trendline support.
The FTSE trades above its ascending trendline dating back to mid May, and above the upward sloping 50 & 100 sma in a bullish trend.
Buyers will be looking for a move beyond resistance at 7100 round number and 7122 the June high to target 7170 the May high.
A break below the trendline support could point to further weakness. It would take a move below 7050, the weekly low and the 100 sma for the bears to gain traction.
GBP/USD trades at upper end of range
The UK economy gathered momentum in April as lockdown restrictions eased and shops, hairdressers and outdoor hospitality reopened.
GDP Mom rose 2.3% despite unexpected declines in manufacturing and construction. Output is now just 3.7% lower than where it was pre-pandemic.
These figures could prompt speculation about when the BoE could start to tighten monetary policy.
Sentiment remains cautious ahead of the G7 meeting in Cornwall and chatter over delaying the UK reopening could keep gains in the Pound capped.
US consumer sentiment data is due later today and is expected to tick higher to 84 in June, up from 82.9
Where next for GBP/USD?
GBP/USD has been trading rangebound across June. The pair is trading at the top end of the range after rebounding off the lower band in the previous session.
The 50 & 100 sma on the 4 hour chart are flat showing a neutral bias.
Buyers will be looking for a move above 1.4180 in order to push through 1.42. Beyond here a more bullish outlook prevails.
It would take a move below 1.41 for the sellers to gain traction and a more bearish picture to emerge.