Yesterday European markets closed lower, as negotiations over Greece’s bailout program continued and the crisis in Ukraine re-escalated. Market sentiment was also hit by disappointing trade data from China with exports dropping 3.3% in January on a year-over-year basis, while imports plunged 19.9%. The data indicated that both global and domestic demand is weakening.
On today’s economic agenda we will have the Industrial Production in December from the UK that is expected to drop from 1.1% to 0.7% and the Manufacturing Production in December is also estimated to fall from 2.7% to 2.0%.
On yesterday session the UK100 initially fell but found enough buying pressure at 6,718 to turn things back up but only manage to close slight in the green near the open of the day. The index is in a choppy consolidation at the high of the year. The stochastic is showing a overbought market setting lower highs and price is making higher highs, signs that the upside may begin to get exhausted.
Expecting a downward move to a daily support at 6,651 on a break below a daily support at 6,764 (scenario 1).
UK100 is a CFD written over FTSE100 futures.