FTSE 100: the footsie returns to test short-term resistance

The Fed and the GAFAM results will be decisive for the rebound of the FTSE 100 this week

The UK stock market rebounded last week along with its international counterparts, as the FTSE 100 took advantage of renewed risk appetite to rally to test important short-term resistance at around 7360 points.

The footsie could continue to benefit from the normalization of short-term investor sentiment after it reached a significant degree of pessimism at the start of the month. Indeed, sentiment remains particularly negative with investor opinion surveys (AAII, Intelligence Investors, NAAIM) still largely bearish.

However, the numerous corporate earnings releases this week and the Fed will be decisive for market sentiment. The market awaits the results of GAFAM and about 50% of the market capitalization of the S&P 500, which should be a source of volatility for the financial markets which are watching the results even more closely due to fears of recession.

Regarding the Fed, traders are expecting another 75 basis point rate hike from the Fed on Wednesday. The risk for the stock market indices would be a more significant rise in rates.

FTSE 100 daily price chart – key levels


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