UK Retail Sales Confirm Expected Expansion – Reaction Subdued

The UK stock market comes to a halt after a week-long rally despite positive retail data.

Gino Bruno D'Alessio•Friday, August 16, 2024•2 min read

FTSE stalls after positive retail sales data

The UK stock market comes to a halt after a week-long rally despite positive retail data.

The FTSE is down 0.25% on the day after Retail Sales confirmed forecasts at 1.4% YoY, up from -0.8% last month. The strong consumer activity gives confidence the economy is expanding.

The data comes after yesterday’s US Retail Data was higher than expected at 1% MoM up from -0.2% previously. As the week comes to a close, traders are likely to cash in on some profits after a strong week in stocks.

The positive UK data led to a small rally that quickly faded as the market saw the week drawing to a close. This week’s rally has been fueled by AI-tech bets and an increasing sentiment of a Fed rate cut in September.

The FTSE has followed the global stock market higher over the week, with improving perception of BoE taking loosening action again in September. The decline in volumes, typical of summer trading, has also given rise to increased volatility and quick changes in direction.

Technical View

The day chart below for the FTSE shows a sideways market undergoing a minor bullish rally. The range is bound by the recent high of 8,411 (red line) and the recent low of 7,910 (grey line).

FTSE stay within range after week long rally

That’s a wide range, however, until the market breaks above or below that range there is no indication of a continuing direction. The market will find immediate support on the top of the Ichimoku cloud, which is also close to a support level of 8,278 (blue line).

To the upside, the next resistance level is at 8,411 (red line), following a break above that level, the next resistance level is at 8,481 (orange line), which corresponds to the all-time high. To consider a bull market as established, we would need to see a close above the all-time high.

FTSE

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ABOUT THE AUTHOR See More

Gino Bruno D'Alessio

Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.