FTSE bottomed, recent data suggest bullish outlook

The FTSE 100 seems to have carved a medium-term bottom at the 6,500 points area that has been tested and held several time since mid-month. After the steep decline from the yearly highs of 6,900 points the recent downtrend has been arrested and positive data coming from the domestic economy support a more bullish outlook.

The encouraging printing of the inflation data earlier this week is a sign that many investors have been waiting for. The report showed that the inflationary pressures that we witnessed in recent months have eased and this allows the Bank of England to continue supporting an extremely accommodative interest rates policy.

This development combined with policymakers’ expressed optimism over the current labor market conditions shows that the economy is continuing on the path of recovery and initial fears that the recovery pace has peaked near the end of 2013 and is now slowing seem to have faded.

Another piece of important data, the Retail Sales report that was released on Thursday surprised on the upside showing that consumer spending is growing even though expectations made word for a lower printing. The FTSE 100 might have not reacted to the report at first but this piece of data adds to the recent string of good news from the UK.

From a technical standpoint, the FTSE 100 looks poised to reach for higher levels and the key resistance area than needs to clear is the 6,650 barrier. If the host of encouraging news discussed above aligns with investors’ risk appetite then we should see the benchmark index revisiting the 6,700 – and potentially – 6,800 points area.

To sum up, I am bullish over the FTSE’s outlook for the next week. There is a number of important releases over the next few sessions with the UK GDP revision and Euro-zone’s inflation report the most notable ones but as long as no surprises occur I believe the FTSE will gain if it manages to clear above the 6,650 barrier.

To receive my free daily newsletter or to subscribe to my premium NewsletterPro service please visit www.investingbetter.com .

Be the first to comment on "FTSE bottomed, recent data suggest bullish outlook"

Leave a comment

Your email address will not be published.


*


error

Enjoy this blog? Please spread the word :)