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Morning Report – Friday 30th July

FTSE to open at 7,025 (-53 pts)

The S&P 500 index hit another record high yesterday as weaker than expected US growth data increased the probability of the Fed maintaining its stimulus for longer.

However, it is important to note that whilst the S&P hit a record high, it failed to post a record close – indicating a lack of conviction behind the breakout.

In Asia, the Chinese sell-off resumed with Hong Kong’s Hang Seng Index set for its worst month since March 2020.

?Risk Barometer Explained

The FTSE broke out above the range which started as an inside day pattern and evolved into a bullish fakeout pattern throughout the week.

Yesterday’s breakout has opened the door for a retest of the major resistance zone which starts at 7,167 and ends at 7,219 (see chart below).

However, this morning’s price action has seen the futures retest the top of the range – an area that we’d expect to provide support moving forward.

FTSE 100 Daily Rolling Futures – Key Levels