By ForexTime
Over the past few months, the index has been influenced by various fundamental forces ranging from the pound’s value to corporate earnings and monetary policy expectations.
Note: The FTSE100 has a strong international focus with 75% of revenues from FTSE100 companies coming from outside the UK.
Looking at the recent price action, a breakout could be on the horizon. This may be triggered by the UK Spring Budget this afternoon, presented by Chancellor of the Exchequer Jeremy Hunt.
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Note: Traders are currently pricing in a 42% probability of a 25-basis point BoE cut by June, with a cut by August fully priced in.
When the pound appreciates, it results to lower revenues for FTSE100 companies that acquire sales from overseas, pulling the UK100 lower as a result. The same is true vice versa.
The FTSE 100 Index (UK100) on the daily time frame made a double bottom and this might signal the end of the current down trend. There is a strong weekly resistance level that will need to be broken though, and this remains to be seen.
On the 4-hour chart an uptrend is in progress with the above-mentioned weekly resistance level at 7689.2 lying right in ahead. Based on projected normal ebb and flow price structures, that means there are two scenarios.
Both the 50 Exponential Moving Average and the Moving Average Convergence Divergence (MACD) Oscillators confirm that the above-stated scenarios are a possibility.
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