- I’m watching the FTSE 100 push higher as the British pound weakens and expectations for Bank of England rate cuts grow.
- I see short-term pullbacks as buying opportunities, targeting 10,000, with 9,500 offering solid support.
The FTSE 100 has rallied again during Wednesday’s session as we continue to see a strong surge higher. I think much of this comes down to the weakening British pound, which has traders anticipating stronger exports. Expectations for central bank loosening are also rising in London, which is boosting enthusiasm for equities—similar to what we’ve already seen in the United States, just with a bit of a delayed reaction.
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At this stage, you could make the case that we’re breaking above the top of the recent channel, which signals an impulsive move higher very similar to what’s happening in the S&P 500 and Nasdaq 100. I think the FTSE 100 is simply following that same formula. Short-term pullbacks will likely find plenty of support, especially near the 9,500 level.
Is 10k Calling?
Ultimately, I expect we’ll make a run toward 10,000. During Wednesday’s session, 9,800 proved to be a temporary barrier, but I believe it’s only a matter of time before we break through it. When you move above a channel like this, it typically points to strong momentum and the potential for an impulsive leg higher.
I have no interest in shorting this index, or any index right now, because global equities are clearly celebrating the return of loose monetary policy. This remains a momentum-driven market, and while 10,000 may be tough to break above initially, it’s far too appealing a target for traders to ignore. We’ll cross that bridge when we get there. Until then, pullbacks end up being buying opportunities, from what I see. I have no scenario in the short term where I see myself shorting this index, as it is one of the better-performing ones in the last ten days.
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