FTSE Rallies on Better Than Expected U.S. Jobs Data
Fears of a recession declined with better than forecast Jobless Claims at 233k down 17k from last month’s 250k.
Fears of a recession declined with better than forecast Jobless Claims at 233k down 17k from last month’s 250k.
The improvement relieved fears that the world’s largest economy might be facing prospects of a recession. At the same time, global stock investors have been pondering over the remarks from Kansas City Fed president Jefrey Smith.
His comments expressed caution on interest rate cuts, leading some investors and analysts to believe easing monetary policy may come later in the year. The view on the street is that the U.S. economy is still on track, and interest rates will inevitably come down if inflation stays in line.
The FTSE rallied 0.27% after the open following other European and U.S. indices higher. Today’s largest gainers in the index include:
- Entain Plc +4.00%
- easyJet +2.10%
- Rightmove Plc +1.84%
The UK stock market is still battling the economic policies the governing Labour party has proposed. These policies include higher taxation and less public spending. The scissor effect of these policies is expected to reduce GDP growth.
Technical View
The day chart below for the FTSE shows a market in a clear bear trend. The break below the Ichimoku cloud, which signaled a bear trend found a bottom at 7,910 (grey line). The market has set 3 green candles since the dip.
The correction higher is now facing resistance from the bottom of the cloud (pink area). The market will find further resistance just above the cloud at 8,278 (blue line). Should that level break, then the next resistance can be found at 8,411 (red line).
To the downside, the market will find support at 8,036 (black line), which corresponds to a support level from April and this week’s trading sessions on Tuesday and Wednesday. Should the market break lower, the next support level is at 7,910 (grey line).
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