FTSE 100 INDEX ANALYSISFirm earnings bolster FTSE 100 index.Downtrend on UK treasury yields continues.Bulls testing rising wedge help.BROADBASED E
FTSE 100 INDEX ANALYSIS
- Firm earnings bolster FTSE 100 index.
- Downtrend on UK treasury yields continues.
- Bulls testing rising wedge help.
BROADBASED EUROPEAN EQUITY GAINS
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The STOXX EUROPE 600 index represents the European fairness area and is buying and selling largely increased at this time after higher than anticipated earnings throughout numerous inventory sectors. The FTSE 100 is not any exception as UK equities adopted go well with with commodity heavyweights corresponding to Royal Dutch Shell PLC, Rio Tinto PLC and Anglo American PLC posting income final seen pre-pandemic. This comes on the again of upper commodity costs together with crude oil, iron ore, copper and platinum which is mirrored within the vitality and fundamental supplies sectors outperformance at this time (see breakdown under):
Chart ready by Warren Venketas, Refinitiv
A fall in new COVID-19 circumstances in addition to the unsurprising determination by the Federal Reserve to keep up rates of interest have bolstered bullish market sentiment. The uncertainty (though fading) round China helps funding elsewhere which ought to present impetus for extra upside. Much like U.S. treasuries, the UK 10-year gilt yield has subsequently fallen (see chart under) which is a probable end result of the shift to funding outdoors of China. Basically, the FTSE 100 index is primed for continued upside. UK gilt yields signify the chance price of investing in UK shares due to this fact, when daring yields fall U.S. shares develop into extra engaging (as a rule of thumb) and vice versa.
FTSE 100 VS GB 10-YEAR GILT
Chart ready by Warren Venketas, Refinitiv
UPCOMING EARNINGS THIS WEEK
Supply: Investing.com
FTSE 100 TECHNICAL ANALYSIS
FTSE 100 Weekly Chart:
Chart ready by Warren Venketas, IG
FTSE 100 Day by day Chart:
Chart ready by Warren Venketas, IG
In the present day, the FTSE 100 is edging towards an uptick of 100 index factors from 7000.00 to 7100.00. This resistance zone coincides with the just lately damaged rising wedge help line (yellow) – see weekly chart above. The Relative Energy Index (RSI) stays barely above the 50 stage which suggests present bullish momentum however might dissipate ought to resistance maintain on the 7100.00 psychological zone.
Value motion reveals buying and selling above the 100-day EMA affirming the current shift to the upside. This uptrend might ensue if costs handle to shut the week above 7100.00. Ought to this occur, subsequent resistance will come from the current swing excessive at 7151.5.
Type the bearish perspective, preliminary help might be supplied by the 20-day and 50-day EMA’s respectively, after which the 7000.00 key stage might come into focus.
— Written by Warren Venketas for DailyFX.com
Contact and comply with Warren on Twitter: @WVenketas
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