Current trend

The leading index of the London Stock Exchange FTSE 100 shows corrective dynamics at 8213.0, related to expectations of the outcome of the Bank of England monetary policy meeting today at 13:00 (GMT 2) and the ongoing correction in the bond market.

Most experts believe that the interest rate will be maintained at 5.25%, since, even though the inflation data presented yesterday recorded a slight slowdown, it is still not enough to switch to a full-fledged "dovish" rate: the consumer price index slowed from 2.3% to 2.0% YoY and added another 0.3% MoM with expectations of 0.4%. At the same time, the retail price index decreased from 3.3% to 3.0% YoY, while analysts expected 3.1%, and adjusted from 0.5% to 0.4% MoM. The core consumer inflation index decreased from 3.9% to 3.5%, and the core producer price index (PPI), without seasonal adjustment, accelerated from 0.3% to 1.0%. 

In turn, the yield on the domestic bond market continues to decline: 10-year debt securities are trading at a rate of 4.102%, which is lower than last week's figure of 4.228%, 20-year — at 4.550% from 4.637% earlier, and the rate on 30-year bonds decreased to 4.602% from 4.674%.

The growth leaders in the index are Smurfit Kappa Group Plc. ( 4.81%), Beazley Plc. ( 2.28%), JD Sports Fashion Plc. ( 1.66%), Anglo American Plc. ( 1.65%).

Among the leaders of the decline are Berkeley Group Holdings Plc. (-6.31%), Segro Plc. (-3.00%), Spirax-Sarco Engineering Plc. (-2.89%).

Support and resistance

On the D1 chart, the index continues to correct, holding above the support line of the ascending channel 8500.0–8140.0.

Technical indicators are in the state of a sell signal, which is actively weakening: the range of EMAs fluctuations on the Alligator indicator is narrowing, and the AO histogram forms new correction bars, turning towards growth.

Support levels: 8140.0, 7960.0.

Resistance levels: 8250.0, 8440.0.

Trading tips

In case of continued growth of the index, as well as price consolidation above the resistance level of 8250.0, buy positions with the target of 8440.0 and stop-loss of 8180.0 will be relevant. Implementation period: 7 days or more.

In the event of a reversal and continued decline in the index, as well as price consolidation below the support level of 8140.0, sell positions with the target of 7960.0 will be relevant. Stop-loss – 8220.0.