- The FTSE 100 is bullish above the February 29 low of 6034 and bearish below.
- German Industrial Production, published this morning, rose by 2.2% YoY vs. the Bloomberg poll projection of -1.6%. This suggests that the economy is doing better than expected.
- This afternoon, U.S. NFIB Small Business Optimism Index is on tap and expected to print 94.
The bullish momentum has slowed down significantly over the last few sessions and the FTSE 100 (FXCM: UK100) is trading sideways between Thursday’s low of 6097 and Friday’s high of 6220. This narrow trading range could be the prelude to a bearish reversal, because a break to Thursday’s low will place the buyers of the last few days at a loss. Theses traders could get tempted to book losses and thereby trigger further sell-orders, initiating a bearish downward trend.
A more important level for the markets and the level I am watching is the February 29 low of 6034. On a break to this level, I would expect bearish momentum to be strong enough for the FTSE 100 to reach the psychological level of 5900. However, for now I am giving the bullish trend the benefit of the doubt, and shall assume that the FTSE 100 is to reach the December 29 high of 6322.
German Industrial Production Picks Up
German Industrial Production rose by 2.2% YoY vs. the Bloomberg poll projection of -1.6%, and -2.2% YoY in December. This outcome is much better than expected and suggests that the German economy is doing better than expected.
Eurozone GDP for the fourth quarter is due at 10:00 GMT and expected to rise by 1.5% YoY.
In the afternoon, U.S. NFIB Small Business Optimism Index is on tap and may lift the FTSE 100 if it beats the 94 projected by a Bloomberg News Survey. No other major data report is on tap and trading will be dominated by technical traders.
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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
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