London wrap – FTSE flat after testing 7200.
Neil Wilson • 1 min read
European equities are a shade on the soft side after dip on Wall Street yesterday as investors take some risk off the table. US stocks were flat to negative yesterday, searching for direction on trade and the state of the US economy ahead of the jobs report Friday. SPX has failed the 2800 test and near term we need to see that breached and the key level of 2817 taken out for bulls to focus on ATHs again. Lack of bid would see a return to around 2713-6 area, the 61/78 retracement levels of the Oct-Dec rout. US economic data has surprised on the upside but the technical pullback following the recent ramp may yet have further to go.
The FTSE 100 was pretty well flat after some early gains, bouncing off resistance at 7200. This area certainly looks like a test but following the break free from the downward broadening wedge. On the 4-hr charts the divergence on the slow stochastics supports a near-term pullback. Check support at 7162, the 23.6% retracement of the move higher since the end of Feb to the 7200 peak.
In equities, tobacco stocks are among the top risers after US FDA chief Scott Gottlieb stepped down. He’s been behind attacks on big tobacco, notably pushes to lower nicotine content in cigarettes and a proposed ban on menthol cigarettes. He also did battle with tobacco firms over ecigarettes. British American Tobacco’s 5% gain added 15 points to the FTSE.