FTSE 100 opens the last trading session of the week lower after the trade tensions rise between USA and China. President Trump announced the ban on U.S. companies and citizens from working with Chinese TikTok and WeChat apps starting 45 days from now. Now analysts fear that China will retaliate banning some U.S. technology companies in China.
Chinese data shows that economic recovery is faster than expected. Today reported that China Exports increase by 7.2% in July, beating the expectations of -0.2%. The imports in China came in at -1.4% below the estimates of +1% as the domestic demand is lagging. Chinese Trade Balance came in at +62.33B well above the forecasts of +42.0B; the previous reading was at +46.42B.
The Bank of England yesterday kept interest rates as was expected by markets and left the bond purchases unchanged. The BoE expects the U.K. economy to contract by 9.5% in 2020 before returning to growth by 9% in 2021. The bank warned that the unemployment rate would remain around 7.5% in 2020. The inflation expected to be subdued and will reach 2% in two years.
Nothing has changed in the technical outlook of the index. FTSE 100 is 0.17% higher at 6,037, with traders indecisive about opening new trading positions as the index has trapped between the 50 and the 100-day moving average.
Let’s see some significant technical levels for FTSE 100. On the downside, initial support stands at 6,000 – 6,012 zone the today’s low. If the index breaks below then might test the 100- day moving average at 5,966. A break below 5,966 would be a bearish signal for the index, and more sellers would join the action targeting 5,858 the low from August 3.
On the upside, immediate resistance is at 6,046 today’s top and then at 6,097 the high from yesterday’s trading session. More selling pressure would emerge at 6,189 the 50-day moving average.
