This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
The FTSE 100 remains in consolidation mode, in a sideways narrowing pattern, digesting the 5% early June rally from 7080. This implies investors in wait-and-see mode. Rather than take a position now, taking on additional risk, they are waiting for a breakout or a breakdown, for confirmation before picking a direction.
While traders are optimistic about looser monetary policy, with a Fed rate cut soon and more stimulus from the ECB, what they really want to know about is trade. Will Presidents Trump and Xi shake hands on a deal to roll back tariffs? Or will the status quo persist, or even worsen? Will equity markets pull back, stay steady, or resume their upward March.
Bulls need a break above 7436 to exit the narrowing pattern to the upside, and push on towards April’s 7530 highs. Another 5% jaunt could take the index all the way back to last years 7800/7900 peak.
Bears require a breach of rising support around 7385 for downside towards 7320, if not 7200.
Our watch levels: Bullish 7440, Bearish 7380
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