The UK benchmark FTSE 100 index may shrug aside recent coronavirus vaccine concerns, and continue pressing higher as the economy progresses into the next stage of Prime Minister Boris Johnson’s four-stage reopening plan.
The UK’s Markit Composite PMI climbed from 49.6 to 56.4 in March, while the Manufacturing PMI signalled the largest expansion in factory activity since February 2011.
With that in mind, swelling optimism and return to a level of economic normality may pave the way for the FTSE 100 to climb to fresh post-crisis highs in the coming weeks.
From a technical perspective, the outlook for the FTSE 100 suggests that further gains are in the offing, as prices coil up below key range resistance at 6830 – 6870.
With the index tracking above all six moving averages, and the RSI snapping its downtrend extending from the November extremes, the path of least resistance seems higher. Gaining a firm foothold above 6870 on a daily close basis would probably signal the resumption of the primary uptrend extending from the March 2020 nadir and propel prices to challenge the December 2019 low (7129). However, if range resistance holds firm, a short-term pullback to the trend-defining 55-EMA (6632) could be on the cards.
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