FTSE Breakout In Play
The recent breakout trade in the FTSE is currently playing out as anticipated with price on course to test the initial target. The fall back in GBP over recent weeks amidst political uncertainty in the UK, has allowed UK asset price to climb. Additionally, diluted BOE rate hike expectations have also helped drive the FTSE higher. The BOE held monetary policy unchanged at its December meeting, disappointing hawks and pushing back against expectations that the bank would tighten.
While Bailey has warned that the BOE will raise rates if wage-price inflation continues higher, near term expectations remain relatively subdued, with traders looking at February as the most likely date for a hike. With this in mind, FTSE looks set to continue higher near term though any strong UK data will likely provide downside shocks.
Technical Views
FTSE
The breakout above the 7241 level has seen price advancing, albeit in a rather laboured way, towards the initial target at 7362.6. Keep an eye on momentum studies as we test that level as divergence is creeping in, suggesting risks of a correction. However, while 7241 holds as support, 7444.3 is the secondary target to play for.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.