FTSE flat ahead of US bank holiday

Heading into the close the FTSE 100 is showing little sign of interest, as a feeling of uncertainty hangs over markets caught between the enthusiasm of the past couple of weeks and the US bank holiday on Monday. 

FTSE runs out of steam

After almost two weeks of rallying higher, it looks like the FTSE 100 has run out of steam. Having retraced much of January’s fall, this says much about the FTSE’s powers of recovery.

Mark Carney's speech at the quarterly inflation meeting has arguably left traders as confused as they were before it. However, the introduction of 18 interest-rate decision-making barometers will leave him with plenty of room for manoeuvre if he decides to move the goal posts at a later stage.

The bad weather recently suffered by the UK is set to continue into the weekend. Monday could see a re-evaluation of insurance, transport and energy firms as a consequence of the disruption caused by mother nature.

Traders prepare for President’s Day

As tends to be the case ahead of a long weekend, US traders are reorganising their portfolios before heading off on the three day break, and this has been a week where they have had plenty of pieces of economic data to analyse. Principally, Federal Reserve chair Janet Yellen comfortably cleared the potential stumbling block of her first testimony in front of the Senate Finance Committee.

The Dow Jones has now completed a 50% retracement of its January falls, and next week will be a good guide with which to prepare US traders who are ready to put the market’s wobbles behind them.

Gold continues to charge above $1300

Gold has continued to charge higher; any fears the bulls had that $1300 would break the momentum have been successfully put to bed. The moves seen in the precious metal over the last couple of weeks have not been driven by panicky equity markets or investors worried that the long bear-move is over.

Crude oil has spent all week in a tight range, increasing the chances of a squeeze when it finally breaks out of its shackles. 

GBP/USD overbought in short term

Considering the commentary that has come out of the central banks of both the US and the UK this week, it is no wonder that we have seen a sizable move in GBP/USD. The US dollar’s continuing strength against the sterling has seen the rate finally set a new high for the year. However, technical traders will no doubt be monitoring how far away from the 200-day moving average it has become, causing many to ask if it is perhaps a little overbought even if only in the short term.

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