Bottom line: FTSE long term bearish outlook remains intact until it trades below 7724 resistance. The weekly chart is indicating further downside towards 4700 levels as traders prepare to resume lower again.
Fundamental Outlook:
FTSE had managed to rally towards the 6200 mark along with Global Indices, until Friday reversal. The indice would be taking cues from Bank of England meeting on interest rates this Thursday. The BoE is expected to follow footsteps of Fed and ECB in keeping rates unchanged. FTSE might come under pressure as Global Recession looms ahead.
EURUSD had gained last Friday primarily after the European Central Bank left interest rated unchanged. The EURO closed the week higher as bulls managed to push through the 1.1000 mark. The bullish sentiment is expected to continue as ECB remains committed for further measures to counter economic impact caused due to COVID-19 pandemic.
GBPUSD managed to gain last week and managed to touch 1.2640/50 mark before pulling back. With no major event risk until Thursday, the currency pair may continue to move range bound between 1.2300 and 1.2600 respectively. In the immediate short term GBPUSD might come under pressure as US Dollar might gain amidst a trade war between US and China.
Technical Analysis:
FTSE might have hit a major resistance just below the 6200 mark last week. The indice had managed to rally towards 6182 levels before reversing sharply lower. FTSE trades around 5700 mark as we write this article and is expected to stay below 6200 levels, going forward.
Structure continues to remain bearish as the counter trend rally that had begun since 4762 lows on March 23, hits resistance. The counter trend rally had managed to reach close to fibonacci 50% retracement of earlier drop between 7696 and 4762 respectively.
High probability remains for a bearish reversal as most traders might have initiated fresh short positions around 6100/6200 levels last week. Protective stops remain above 6900 while projected targets might be below 4700 mark respectively.
Prepared by
Harsh Japee, Technical Analyst.
FTSE Chart
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