FTSE 100, British Pound (GBP) Nudge Higher on Positive News Flow
FTSE 100 and GBP/USD Price, Chart, and AnalysisOmicron may not be as severe as the Delta variant, according to recent studies.US Q3 GDP data beat market expectations.The FTSE 100 is trading around 0.4% higher in early turnover mirroring gains seen in the US yesterday and Asian markets overnight. News from South Africa that the risk of hospitalization from Omicron is substantially lower than the Delta variant, echoed by new studies from the Universities of Edinburgh and Strathclyde, is giving the markets a leg-up going into the festive break, as fears of further lockdowns begin to recede. Positive US economic news also is helping the market regain recent losses with yesterday’s final GDP print beating market expectations. Traders should keep an eye out for US core PCE (13:30 GMT) and Michigan Consumer Sentiment (15:00 GMT) releases later today as the markets wind down for the festive break. Keep up to date with all market-moving data releases and events by using the DailyFX CalendarThe FTSE 100 rebound from Monday’s sub-7100 low continues with the index currently quoted around 7,340 and nearing the 10-month high of 7,405 made on November 12. With fears of further lockdown measures put on hold for the time being, the recent high may come under pressure in the short term unless the UK government follows through with their mooted plans of imposing new restrictions after this weekend. FTSE 100 Daily Price Chart, December 23, 2021Cable is now entering a cluster of old resistance levels which are likely to slow down further upside momentum. The longer-term outlook for GBP/USD looks negative on the daily chart with an unbroken series of lower highs and lower lows still in place, but the cluster of support around 1.3160 should prove difficult to break in the event of any sell-off. For now, 1.3412 should act as resistance.Retail sentiment data – see below – show that traders have pared back their net-long positions and sharply increased their net-short positions over the last week, suggesting a bullish contrarian bias for cable.GBP/USD Daily Price Chart – December 23, 2021Retail trader data show 62.36% of traders are net-long with the ratio of traders long to short at 1.66 to 1. The number of traders net-long is 16.93% lower than yesterday and 15.03% lower from last week, while the number of traders net-short is 47.30% higher than yesterday and 38.57% higher from last week.We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.What is your view on the FTSE 100 andGBP/USD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
element inside the element. This is probably not what you meant to do!