In a week where traders were forced to navigate an interest rate decision and crucial statistics on their economic growth, the FTSE 100 index (LSE: UKX) kicked off the Friday session in the green as traders started to weigh up the information in the latest GDP data release.
On Thursday, the Bank of England delivered another 25bps interest rate hike as persistent double-digit inflation continues to call for a more restrictive policy. The monetary policy committee predicted a slower-than-expected fall in inflation as we advance, opening the possibility for further rate hikes. However, they also revised their economic growth projections upward, as they believe the UK will avoid a recession in the upcoming year. On Friday, preliminary statistics showed a quarterly GDP growth rate of 0.1%, unchanged from the prior period and in line with expectations. Year-on-year statistics showed a 0.2% growth rate moderating from the previous 0.6% while remaining aligned with the market’s consensus.
Technical
On the 1D chart, a symmetrical triangle has formed, with support at the daily pivot point of 7,731.49. With the bulls starting the day in the green, the 23.6% Fibonacci retracement from the late April peak is in focus at 7,789.58. If the bulls break through this resistance, they could test the triangle resistance at 7,876.21. From there, the peak at 7,936.90 could confirm the reversal of the retracement until higher resistance at 8,021.54 would come into play.
Conversely, if the bulls fail to move above 7,789.58, the market could consolidate around the pivot point and triangle support. If the bears reverse the momentum for a triangle breakdown, the retracement could continue toward 7,698.44, 7,624.78 and the Fibonacci golden ratio at 7,551.11.
Summary
After a crucial week, the Bulls have started the Friday session on the front foot for the FTSE 100. While consolidation could continue within the triangle, the bulls could look to test the 7,789.58 resistance for a move toward 7,876.21.
Sources: Koyfin, Tradingview, Reuters
