The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
FTSE lifted by US data boost
Friday’s selloff was stopped in its tracks by a particularly strong reaction to the somewhat obscure US employment cost index. This provided a leg up for global indices and gave the FTSE a more bullish tone.
Following the inability to create a new high, we were watching for a new low, yet this didn’t happen and the subsequent data-driven high points towards a possible resumption of last week’s move higher.
The 50-hour SMA is clearly key here as it has provided support on two occasions now. The hammer candle posted at that moving average has led to gains, which point towards a break above 6710. However, the 6727 resistance is probably more important. I need to see a move above 6727 to gain confidence of a major move higher.
With the current rising wedge formation coming within an uptrend, I would still expect us to move lower from this pattern in the near future. However, the 6672 level and 50-hour SMA will be crucial to today’s price action. Thus while I am bullish in the short term as long as the price is above 6672, I do expect us to move lower towards 6649, 6639 and 6624 levels.