The fact that the FTSE can advance despite the terrible data tells us that right now risk sentiment is more important than macro data. Risk sentiment is interested in coronavirus statistics and ultimately when lock downs across the globe can end. The sooner the lock down’s halt or ease, the sooner the recovery can begin.
However, there are growing concerns over the UK’s exit strategy. Testing here so far has been a complete failure. As we move past the coronavirus peak more attention will turn to plans to end the lockdown. The lack of a solid exit strategy could hit sentiment.
A stronger pound means the FTSE is slightly lagging its European peers in early trade. The Pound is rebounding despite Boris Johnson’s admission to the ICU at St Thomas’ Hospital. The government’s plan aimed at calming the public as the UK moves towards its peak in the coming days, appears to be working.
Levels to watch
The FTSE futures are pointing to a 1.5% jump on the open. The UK index trades above its 50 & 100 sma on the 4 hour chart. The price action remains within a horizontal channel since 25th March.
Immediate resistance can be seen at 5707 (high 31st March) prior to 5830 (high 26th March) a move beyond this level could see more bulls jump in.
Support can be seen at 5530 (50 sma) prior to 5360 (100 sma) and 5330 (lower bound on the channel).