FTSE 100 Receives A Boost On A Dovish Yellen

Talking Points

• Fed’s Janet Yellen boosts stocks.
• The FTSE 100 continues to digest its gains from mid-February.
• ADP Employment Change On Deck Today.

The FTSE 100 continues to digest its gains from mid-February.

However, the underlying trend is bullish above the March 10 low of 6006, as it is the most recent swing low and higher than the preceding swing low of 5843.

The March 18 high of 6237 is not only the March high, but also a short-term resistance. Beyond the March high the next important resistance level is the December 29 high of 6322.

Support levels are the March 10 low of 6006, followed by the February 24 low of 5843.

Fed’s Janet Yellen Boosts Stocks

Yesterday, U.S. equity markets closed higher and likewise so did several emerging markets following the higher stock prices in the USA.

The motivation to the higher stock prices was likely present following a speech by Fed Chair Yellen, indicating that the threshold of raising rates is higher than previously believed by the markets. As a consequence of the dovish statement short-term U.S. interest rates declined and stock markets gained. For details about the speech please see US Dollar Drops Sharply After Yellen’s Dovish Comments.

We also note that U.S. Consumer Confidence rose to 96.2 vs. the Bloomberg survey projection of 94.0, while U.S. house prices (S&P/Case-Shiller Composite-20) rose by 5.75% YoY vs. the estimated 5.73%.

ADP Employment Change On Deck

Reports which may affect the FTSE 100 are U.S. ADP Employment Change which is seen rising by 195K from 214K in the prior month and the weekly U.S. Crude Oil Inventories report which is expected to show an inventory build of 3 million barrels.

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FTSE 100 | FXCM: UK100

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

original source

By: Alejandro Zambrano, Market Analyst