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FTSE 100 – London’s FTSE Soaring Higher

FTSE 100 Daily Chart
FTSE 100 Daily Chart

FTSE 100 (6,393.13)

Some points to take away from this article:

  • London’s FTSE has soared higher to fresh highs.
  • This week’s US data along with the Markit services PMI and durable goods orders should keep the FTSE higher as we finish the week.

The FTSE 100 has soared higher taking out the high price point and technical level of 6,367. This was the high set last week on November 19, 2015. This accomplishment now opens the doors to challenge the November 5, 2015 high at 6,422. Short term, day traders, will look at and use the intraday low of 6,320, set on November 25, for long traders. Their target should be the level at 6,422. Also, please note the bullish divergence with the RSI indicator. This is visible on the above daily FTSE 100 MT 4 chart. This indicates that there are future gains in the cards for this equities market and why it should remain bullish going into the end of the week.

There are many drivers for this rally. The FTSE is catching up with this week’s US data. The US released their Markit services PMI, durable goods and jobless claims. All of these beat analysist expectations. The US inflation numbers, both their PCE and Core PCE, remained unchanged and did not inch higher as analysts expected.

This is great news for equity markets. Equities love and rally when there is solid economic growth and low, stable inflation. Why? This means the US Fed is unlikely to make a really aggressive move in December when they could hike interest rates and normalize monetary policy. Also the low inflation data makes it less likely there will be aggressive positioning with the Dollar. This will help commodities and capital inflows into equity markets like the FTSE 100.

Economic Calendar

Not a lot on tap for today. The United Kingdom will release their third quarter (annual) gross domestic product (GDP). Other than that no other key data is expected.

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