FTSE 100 makes fresh three week highs following a strong session in Asian markets and as the futures in Wall Street adding over one percent. Reopening optimism boost risky assets across the globe as the coronavirus death toll continues to drop in Europe. News of progress in another coronavirus vaccine from Novavax also helps. In the UK would be another round of opening by the non-essential business on June 15.
Some positive macro news yesterday better IFO business climate data from Germany also helps sentiment.
Lloyds Banking (LLOY) is 5.05% higher at 29.54, Barclays (BARC) is 4.60% higher at 107.88, Royal Dutch Shell is 3.62$ at 1,339 and Vodafone (VOD) is 0.60% higher at 130.79.
FTSE 100 stocks are relying on monetary and fiscal support, but I need to see a rather rapid global recovery to be more bullish on current levels as the macro data will continue to disappoint in the upcoming quarter.
The previous week the UK Retail Sales came in at -18.1% well below the expectations of -16% for April. The Retail Sales excluding Fuel came in at -15.2% also below the forecasts of -15%. I expect now that the Bank of England (BOE) will increase its bond purchases at next month’s meeting.
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FTSE 100 is 1.90% higher at 6,107 hitting the higher level since April 30, as the index breaks to the upside the recent consolidation phase. FTSE 100 technical outlook is positive now for the short term but for the longer-term remains bearish despite the recent rally.
On the upside, initial resistance for the FTSE 100 index stands at 6,130 the daily high. The next resistance for the FTSE 100 index is at 6,226 the high from March 10 trading session. If the FTSE 100 breaks above 6,226 the next resistance will be met at 6,482 the 100-day moving average.
On the flip side, first support for the FTSE 100 index stands at 5,993 the daily low. If the index breaks lower, the next support is at 5,891 the low from May 22. More support for the FTSE would be met at 5,785 the May 18 lows.