FTSE 100 Slides as Bank of England Holds Rates Steady – Coronavirus Outbreak

Summary:
• FTSE 100 slides after the Bank of England kept its interest rate unchanged at 0.75%. The seven members voted for the rates to stay on hold

FTSE 100 slides after the Bank of England kept its interest rate unchanged at 0.75%. The seven members voted for the rates to stay on hold while two members, Saunders and Haskel voted to cut the bank rate to 0.50%. The UK economy was weak at the end of 2019 enough to make an interest rate cut look necessary, but positive economic indicators in 2020 have allowed the committee members to keep rates steady.

More pressure for stocks coming from the coronavirus spread, as confirmed cases increase and the death toll reached 170. Several airlines cancelled the trips to China, while Russia closed the borders with China.

FTSE 100 is 1.34% lower at 7383 cancelling the two days positive rebound. While the main European major stock indices are also under pressure. Dax is 1.12% lower at 13193. Cac 40 drops 1.51% at 5865, and the futures in Wall Street are over 0.50% lower.

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FTSE 100 Technical Outlook

The heavy losses today cancelled the recent rebound shifting traders attention to lower levels. The index breached early in the session the 50-day moving average and the selling accelerated after the BOE decision. The technical outlook is bearish now as the index now threatens the 100 and 200-day moving average.

On the downside, first support for the FTSE index stands at 7,375 the 100-day moving average. Next support for the index is the daily low at 733367. If FTSE 100 index breaks below, the next critical support zone will be met at 7223 the low from December 13^th.

On the other side, initial resistance for the FTSE 100 stands at 7,464 the 50-day moving average. Next resistance will be met at 7483 the daily top. The next supply zone for FTSE will be met at 7517 the high from the trading session yesterday.