The British FTSE 100 index was seen somewhat lower during the London session on Wednesday, trading near 7,320 GBP.
Meanwhile, data released today showed that the UK economy expanded 1.1% during the third quarter of 2021, lower than the 1.3% estimated in the preliminary report. On the other hand, the yearly gauge was upwardly revised to 6.8% from 6.6% reported previously.
Additionally, the current account deficit nearly doubled in Q3, rising to 24.44 billion GDP, from the deficit of 13.46 billion GDP in the second quarter. Lastly, the quarterly change in total investment fell to -2.5% (from 0.4 previously), but the yearly gauge advanced notably, from 0.8% to 2.6%.
The FTSE index failed to react to these data and remained slightly lower on the day, consolidating after this week’s huger rally.
From other news, Prime Minister Boris Johnson said he would not introduce new curbs in England before Christmas, and Chancellor Rishi Sunak announced 1 billion GBP of extra support for businesses hit hardest by the recent surge.
Later today, the US third-quarter GDP revision is due along with PCE indices. However, these data are not expected to cause any volatility as most market participants are already off for the Christmas holiday.
Additionally, existing home sales will be published, and the consumer confidence index for December is due as well. Lastly, the EIA crude oil stocks are on the schedule today.
Monday’s candle looks like a perfect bullish pin bar, sending the price sharply higher yesterday. The short-term trend still seems bullish as the index is again attacking this year’s highs.
The key resistance is in the 7,350 - 7,400 GBP area. Once that is broken to the upside, we might see another leg higher toward the 8,000 GBP level (from the medium-term perspective).
It looks like traders are ignoring rate hikes in the BoE (and monetary policy tightening in the US), possibly supporting the indices in 2022.
Alternatively, the support is now seen at 7,250 GBP, followed by the strong buying zone near 7,100 GBP, where this week’s lows are converged with the 200-day moving average.