Bad news is good news
Today’s reaction to weak UK July preliminary PMI figures (highlighting the economy at weakest since 2009 ) was the classic “bad news is good news” trade. Weak data pushed up prospects of BOE acting (rate cut/QE) in July. Thus, Pound weakened and FTSE spiked to a high of 6730 levels.
Technicals – Bulls need a daily closing above 6744
- Despite sharp recovery in FTSE100 from daily lows of 6663 to 6730, prices fail to see a break above symmetrical triangle resistance on hourly, while the continues to form lower highs.
- The price action suggests we could break lower from this week’s consolidation pattern.
- Only a day end closing today or next week above 6744 would suggest continuation of a rally from post Brexit low and open doors for 6800+ levels.
Check out Tim Young, Trader at Ayondo who joined us on today’s Finance show to discuss his views on FTSE100 – Link - https://www.youtube.com/watch?v=cOVKrWHSVmg