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.