Weak Retail Data Pressures FTSE 100

Summary:
• FTSE 100 started the session 0.38% lower at 7,323.1 despite stronger than expected GDP data from Germany while problems on trade negotiations

FTSE 100 started the session 0.38% lower at 7,323.1 despite stronger than expected GDP data from Germany while problems on trade negotiations on specifics about the agricultural purchases from China weigh on investors sentiment. President Trump said that China-US trade deal might happen soon and the phase one agreement is close, but he also said that if a deal isn’t reached the US will raise tariffs. Meanwhile escalating tensions in Hong Kong also weigh on equities around the globe.

On the data front, the UK Retail Sales (month over month) came in at -0.1% below forecasts of  0.2% in October; the yearly reading came in at 3.1%, also below expectations of 3.7% in October. The Retail Sales ex-Fuel (month over month) came in at -0.3% below forecasts of 0.2% in October.

In the latest poll, the Conservatives lead by 14 points over Labour after Nigel Farage’s announcement that he would withdraw Brexit party from candidates from Tory-held seats.

UK heads to the general election in December that increases the uncertainty for the short term but might clarify the political situation for 2020.

FTSE 100 Support and Resistance Levels to Watch

On the technical side, FTSE returns below the 100-day moving average as of writing which if broken convincingly might have negative implication for the index. The index formed a death cross pattern on October 10, as the 50-day moving average crossed below the 200-day MA giving a bearish signal for FTSE.

On the downside, first support stands at 7,316.5 today’s low, while a break below that support level will open the way for a test of 7,306 the 200-day moving average. Below this level, the next support target comes at 7.285 the 50-day moving average.

On the upside FTSE 100 facing immediate resistance at 7,351 daily high and then at 7,440 the high from September 27^th. If FTSE 100 manages to pierce above that level convincingly could open the way for a move up to 7,580 the August highs.

European equity indices also trading lower today, Dax 30 is 0.27% lower at 13,193 the CAC 40 in Paris trading 0.03% lower at 5,905, In Milan, the FTSE MIB is 0.05% lower at 23,556.

In Wall Street futures are trading lower, the Dow Jones futures are 0.13% lower at 27,726, the S&P 500 futures are 0.14% lower at 3,091 while the Nasdaq futures are 0.12% lower at 8,256 signalling a negative start for equities in the other side of the Atlantic.