FTSE Climbs to 2-Mth Highs

The FTSE 100 index, also known as the Footsie, was trading 0.3% higher ahead of the US session, as it jumped above 7,600 GBP for the first since February.

Richard Hunter, head of markets at Interactive Investor, said: “The late recovery on Wall Street and the accompanying hunt for defensive cash earners have fed straight through to the UK’s premier index, where a strong opening adds to previous gains and leaves the FTSE 100 ahead by 3.1% in the year to date.”

Bulls have pushed the index to the key resistance zone of previous highs in the 7,630 – 7,685 GBP. So it looks like FTSE 100 index was the first major index to recover from the Ukraine-Russia war correction completely.

While the FTSE 100 has nearly returned to its February highs, thanks to the strong performance of oil, mining, and banks, the DAX and others continue to struggle, remaining well below the highs from earlier in the year as their close economic links to Russia make investors nervous.

Should the index jump above that resistance, larger stop-losses of short positions will be hit, likely sending the  Footsie higher toward 7,800 GBP. That would be the highest level since the summer of 2018.

On the other hand, any corrections are expected to be bought in the 7,550 GBP area. Therefore, as long as the index trades above the 50-day average (the purple line), currently near 7,450 GBP, the medium and short-term outlooks appear bullish. 

Source: https://www.axiory.com/-/technical-analysis/ftse-climbs-to-2-mth-highs