FTSE closes higher, but below 7475 resistance

The FTSE charged higher in early trade on Tuesday, boosted by a broad risk on sentiment across global markets and a weaker pound. Propping up the FTSE are financials and the large multinationals which earn substantial profits abroad and so benefit from the favourable exchange rate. This morning’s rally ran out of steam later in the session and the FTSE is coasted through the afternoon, following a mildly stronger open on Wall Street.

If the FTSE holds its nerve it could on track to hit a record high of 2019. However, the UK index needs to over come resistance at 7475, last week’s high a level that it has bounced off a couple of times. Investors opted to hold fire below the key resistance of 7475 until China’s GDP is released overnight. This will provide a strong clue as to whether the global economy is stabilising or whether there is more bad news to come.

Brexit talk trouble overshadows strong wage growth

The pound barely reacted to the UK labour data. Unemployment held steady at 3.9%. Wages growth came in as expected at 3.5% yoy in the three months to February, whilst January’s figure was also revised higher to 3.5%. Whilst wages impressed, an area of concern was the jobless claim count. This jumped to 28.3K, significantly above the 20k forecast. The number of people filing for unemployment benefit has been on the rise for quite some time. Whilst today’s numbers are not anywhere near weak enough to create alarm, a continuation of this current trend could point to clouds forming on the horizon. This could be an early indication that tightening of the UK labour market is starting to slow.

The pound’s reaction was muted to the report as Brexit headlines and reports of talks stalling between Theresa May and Jeremy Corbyn dragged on demand for the pound.

Dax surges on rebounding ZEW sentiment data

The Dax was outperforming its peers on Tuesday and climbed to a six-month high as traders cheered strong German ZEW sentiment data. After a year of gloom, the outlook in Germany is finally brightening. The German ZEW sentiment data rebounding strongly to 3.1, well above the 0.5 expected suggests that the powerhouse of Europe is finally managing to put its manufacturing woes behind it.

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD: Fresh lows, channel support tested, Golden Ratio in focus

Bears taking out the H&S neckline, target channel support/uptrend at 0.6829. Failures of the channel open risk to 61.8% Fibo and then 0.6755 November low. The risk-off mood in Asia not helping bull's case ahead of key data and an expected rate cut from a dovish RBA.


USD/JPY: Major bull cross fails to inspire Yen bears

USD/JPY is hovering below 110.00 with yen showing resilience, despite the bullish development on technical charts. The S&P 500 futures are hinting at risk reset in the markets. A notable equity market recovery could weigh over yen. 


Coronavirus FX Selloff, CAD Prime for Bank of Canada Breakout?

The most influential story for the financial markets today was reports that the first US case of corona virus has been confirmed. This deadly virus is spreading across the globe creating concerns about the impact on travel and consumer spending.

Read more

Gold: Stays below $1,560 following Tuesday’s bearish spinning top

Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick formation, backed by bearish MACD, during the previous day.

Gold News

GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline

GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.


Forex Majors