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FTSE 100 Index Outlook: Is 7,700 Possible Before EOY?

Abdullah Sarwar Lead Market Analyst

The FTSE 100 index is struggling to catch up to the global stock rally. However, the benchmark index of UK equities remains 6.5% below its yearly high of 8,047, which is also an all-time high. Recently, the index has broken above a diagonal resistance, which has the potential to transform into a bigger rally.

The CPI figures of October 2023 indicated a significant cooldown in UK inflation as the YoY inflation fell to 4.6% against the forecast of 4.8%. This was a major drop from the September CPI of 6.7%, which meant that the Bank of England was now less likely to raise interest rates in this year.

While the cooling down of inflation is surely a tailwind for the FTSE 100 index, inflation still remains far above the BOE target of 2%. Due to this reason, most investors are taking a cautious approach while investing in UK equities.

Technical analysis gives us even a better outlook as the index is currently respecting a downward trendline on a high timeframe. The following weekly chart depicts a breakout from the trendline. In case of confirmation of this breakout, the FTSE 100 index forecast will become fairly bullish.

FTSE 100 Index Chart
FTSE Technical Analysis