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FTSE 100 Outlook: Risk Sentiment Sours, FTSE 100 Eyes Support


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FTSE 100 ANALYSIS AND TALKING POINTS

  • FTSE 100 breaks lower as commodities slide
  • Lower Yuan to weigh on FTSE 100

FTSE 100 Outlook: Risk Sentiment Sours, FTSE 100 Eyes Support

 

Risk sentiment continues to sour with the FTSE 100 also under pressure as the index breaks below 7300. I mentioned previously that around the recent range top (7600-50) had been a good area to look for a pullback in the index, particularly as China slowdown risks had been picking up. This had also been reflected in the move higher in USD/CNH, which is now firmly above the 2022 highs despite Beijing’s attempt to pushback back against Yuan weakness. As such, with the FTSE 100 more exposed to China relative to its counterparts given commodity-intensive companies within the index, further softness in the Yuan will continue to weigh on the FTSE.

On the technical front, near-term support is situated at 7220 with a closing break below opening up the doors towards 7000. Meanwhile, on the topside, resistance is situated at 7400 (200DMA)

FTSE 100 CHART: DAILY TIME FRAME

FTSE 100 Outlook: Risk Sentiment Sours, FTSE 100 Eyes Support

Source: Refinitiv

 

 

Aug 31, 2022 | DailyFX
Justin McQueen, Strategist

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