FTSE 100: In A Rising Wedge
Hugo O'Neill | Apr 21, 2015 04:02AM ET
Yesterday European markets closed higher, after China's central bank on Sunday lowered the reserve requirement ratio (RRR) for all banks by 100 basis points. The wider-than-expected cut was the second reduction in two months, as the world's second-largest economy attempts to combat slowing growth.
Data released on Friday by the Office for National Statistics (ONS), revealed that the unemployment dropped to a seven-year low and the number of people out of work fell by 76,000 to 1.84 million in the three month period (December 2014 to February 2015). Statistics also showed a drop of 5.6% in unemployment rate, the lowest level since July 2008.
Since the beginning of the year the FTSE 100 surged more than 6.5% and is in a bullish phase.
On yesterday session the Index found support on the 10-day moving average rising and closed in the middle of the daily range within the previous day range creating an inside day. The stochastic is showing an overbought and displaying bearish momentum.
Expecting a downward move to a key level at 6,840 on a break below previous day low at 6,976 (scenario 1) or a break above the previous day high at 7,022 could push the Index up to year high at 7,076 (scenario 2).
UK100 is a CFD written over FTSE 100 futures.
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