EURGBP
The FTSE 100 is pointing to a higher open as the US stimulus hopes and upcoming Wall Street earnings excite investors. The index is also rising after Boohoo announced that it would acquire the Debenhams brand. It is trading at £6,667, which is in the same range where it has been in the past few days.
What’s happening: The FTSE 100 index is rising as traders continue being optimistic about the upcoming stimulus in the United States. The first package worth about $1.9 trillion could be approved in the next few weeks since several Republicans seem open to the idea of more funding. Such a package will be positive for the FTSE 100 since UK companies do a lot of business in the US. Also, it will boost confidence in the market.
The earning calendar in the UK will be relatively muted this week since only a few smaller companies will publish their trading updates. Still, earnings from American tech giants like Apple and Facebook will have an impact on the FTSE 100.
The FTSE 100 is reacting to the decision by Boohoo to acquire the Debenhams brand. The company will then close most of its retail stores and only remain with its online brand. The total transaction will be worth about £50 million. In another deal, Asos will likely acquire Topshop from Arcadia Group.
The FTSE 100 index has been in a tight range in the past few days. On the four-hour chart, it has formed a small descending channel that’s shown in purple. It is also at the same level as the 25-day exponential moving averages (EMA) and slightly above the 23.6% Fibonacci retracement level.
Therefore, for today, I suspect that the index will remain in the current range since there’s not much going on. The key support and resistance levels to watch are £6,655 and £6,780.
