The FTSE could be the next major stock index to join the global rally after Wall Street hit a fresh record high and the DAX climbed to its best level since 2018 as the German index closed in on its record peak. UK markets have lagged behind in part because of Brexit uncertainty. But with global markets rallying, the FTSE could soon join the fun.

Sentiment towards stocks remain positive mainly because of ongoing support from central banks with interest rates at or near zero and QE still in operation in major economies. This week we have also had some upbeat data from the Eurozone in the form of retail sales, services PMIs and German industrial production. Meanwhile, in the UK investors seem to have warmed to the idea of the Bank of England potentially cutting interest rates after Governor Mark Carney’s warning the day before. This has provided support for the FTSE with the pound coming under pressure. On top of this, you have ebbing tensions in the Middle East and the expected signing of a phase one US–China trade deal next week, providing additional support for global markets.

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From a technical point of view, and despite today’s weakness, the FTSE looks bullish following its breakout above key resistance in the 7430-7445 area in mid-December. Since then, the index has been stuck inside a consolidation pattern, not too far off its highs it hit in the summer. The consolidation has allowed momentum indicators such as the Relative Strength Index (RSI) to work off their “overbought” conditions mainly through time than price action. This is bullish. With the oscillators no longer being “overbought,” fresh buyers could be tempted to step in and drive the FTSE to new multi-month highs soon. This move could be in motion already given the yet-to-be-completed doji candle on the weekly.

In the short-term, a break above 7620 resistance could pave the way towards the 2019 high of 7728/30 hit in July. The all-time high comes in at 7885. Meanwhile, the next short-term support levels come in around 7580 and then at 7550. But even if these levels break, the technical outlook would still remain positive in slightly longer-term outlook so long as the above-mentioned breakout area at 7430-7445 holds.