The FTSE 100 has retreated on Wednesday from its intraday highs as risk-off rotation in London has shifted capital elsewhere. However, the overall trend is still strong at this point.
FTSE 100
The FTSE 100 has retreated on Wednesday from its intraday highs as risk-off rotation in some sector-specific weakness is causing some problems. Despite the fact that mining stocks have done very well, which makes sense considering that gold had hit an all-time high during the session, the index is struggling at the hands of a decline in healthcare and banking sector names.
Broader market sentiment is currently dominated by the US dollar and the instability following a few comments from President Trump, which has driven capital into traditional havens such as the Swiss Franc and the gold market. This has been a recent scenario that seems to play out over and over in this environment.
While Wall Street did see the S&P 500 breakout at one point during the day, the European indices have failed to follow suit with the FTSE slipping as investors await the Federal Reserve’s interest rate decision and, of course, domestically the sterling having resilience above $1.37 is acting as a significant headwind to some multinational exporters.
Key Technical Levels and Market Outlook
At this point, I still believe that the 10,000 level is a major psychological level that people will be watching, but it isn’t necessarily the be-all and end-all of support. We also have immediate support near the 10,145 level, so let’s watch that as well.
But at the end of the day, the FTSE 100 still looks very bullish, and I just don’t see any reason to start shorting this market anytime soon. In fact, I think we would probably have to break below 9,500 to have that conversation. I don’t see that happening any time soon.
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