FTSE 100 index falls in Friday’s futures tracking
IG analysts say the Footsie is primed for another major move lower.
UK benchmark FTSE 100 index saw what little gains made in the previous session eroded in pre-market trading hours on Friday 03 April, based on IG trading data.
IG's pre-market FTSE 100 price estimates showed that the index fell 1.3% to a price of 5,426.7 as at 04:25 GMT.
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Slight improvement for FTSE 100
On Thursday 02 April, the Footsie closed 0.47% higher, amid what was a relatively quiet day for global markets. The S&P 500 and Dow Jones Industrial Average indexes in the US, by comparison, finished slightly over 2% on the day. Germany’s DAX edged up 0.27% at conclusion.
A zoom out at a look of the whole week reveals a similar picture. The FTSE 100 is currently still up 1.6% from Monday’s opening mark, after having spiked up as much 2.7% earlier in the week on Tuesday.
Tuesday’s rally was buoyed by Asian and US market positive momentum swings on the back of better-than-expected China manufacturing data and end-of-quarter investor asset reassessments.
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Despite the market’s slight improvement, the total number of coronavirus cases and deaths continue to rise rapidly in the UK. On Wednesday 01 April, the country recorded 561 deaths – the highest one-day death toll since tracking began. There are now 33,718 confirmed cases in the UK.
Last week, UK Prime Minister Boris Johnson and Health Minister Matt Hancock also revealed that they tested positive for the virus.
IG analyst: FTSE primed for another major move lower
From a technical standpoint, IG UK senior market analyst Joshua Mahony said that while Wednesday’s sharp decline signifies that the index is seeking to reverse earlier gains, the subsequent overnight rally has taken price ‘into a shorter-term Fibonacci resistance level, with the 76.4% level at 5475 now worth watching’.
‘As long as the price remains below the 5517 swing high, this rebound could be capped for another bearish move back towards the 5340 support level,’ he wrote, adding that the short-term outlook going into the weekend will be determined by whether there is a break below 5340 or above 5517.
In either case, he posits that there is a ‘good chance’ that the FTSE 100 is priming itself for another major move lower.
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