**FTSE 100 Aims for Record High, GBP/USD Recovers as Gold Hits All-Time High**
*By Axel Rudolph, IG Senior Market Analyst*
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The UK’s FTSE 100 is on track for another record-breaking session, with bullish sentiment persisting despite a backdrop of global uncertainty. Meanwhile, sterling has recouped earlier losses against the US dollar, and spot gold has soared to fresh all-time highs. This article provides an in-depth analysis of these pivotal market moves, examining the driving factors, technical outlooks, and implications for traders.
## FTSE 100 Approaches Record Territory
The London Stock Exchange’s premier index, the FTSE 100, continues its impressive rally, flirting with new all-time highs. The market’s bullishness persists against a mosaic of global factors, including shifting monetary policy expectations, robust corporate earnings, constructive economic data, and risk-on sentiment across equity markets.
**Key factors underpinning the FTSE 100’s surge:**
– **Corporate Earnings Momentum:** UK blue-chip companies have posted stronger-than-expected earnings, with solid performance in the finance, mining, and energy sectors.
– **Dividend Yield Appeal:** The FTSE 100 remains attractive for global investors seeking yield, particularly amid potentially volatile interest-rate environments in the US and Eurozone.
– **Sterling Weakness:** Earlier year weakness in sterling has boosted overseas revenues for many multinational constituents in the index, supporting share price performance.
– **Sectoral Rotation:** The rotation out of technology into value-oriented sectors such as energy, commodities, and financials has favoured the London market.
**Technical Analysis:**
– The FTSE 100 currently eyes the psychological milestone at 8,300 points, with technical momentum well-supported by moving average alignment.
– Immediate resistance is seen around the 8,285 level; a sustained break above this could pave the way to further gains, targeting the next round figure resistance.
– On the downside, the 8,200-8,220 range serves as critical support for short-term bullish structure.
**Trader Implications:**
– A move above the recent record high could trigger stop orders and incremental momentum buying, while a failure to hold above support levels may invite profit-taking.
## GBP/USD Regains Ground Amid Dollar Consolidation
The British pound staged a recovery against the US dollar, reversing from multi-week lows. The cable pair has benefited from a moderation in US dollar strength, as traders reassess dovish expectations for Federal Reserve policy while digesting recent US macroeconomic data.
**Fundamental dynamics affecting GBP/USD:**
– **BoE’s Policy Stance:** Although UK inflation remains stubbornly above target, recent Bank of England communications suggest a patient, data-dependent approach to rate adjustments.
– **Differential Interest Rate Expectations:** The Federal Reserve’s rate path remains a key driver. As US inflation figures prompt periodic reassessment of rate cut timings, GBP/USD reacts accordingly.
– **Economic Data Releases:** Upbeat UK GDP figures and a surprise uptick in services PMI have lent some much-needed support to the pound.
**Technical Analysis:**
– GBP/USD has rebounded toward the 1.2700 level after finding buying interest near 1.2580.
– The 50-day moving average at 1.2690 is the first resistance; a sustained move above opens the door toward 1.2785, the late May high.
– Support lies at 1.2630-1.2640. A drop below this region would expose the pair to further weakness toward 1.2590.
**Trader Considerations:**
– Cross-asset volatility and headline risk remain high. Sterling traders should remain alert to US data and Fed commentary, given the ongoing sensitivity of the US dollar.
– Any shifts in Bank of England rhetoric, particularly on inflation and wage data, can quickly reprice GBP/USD.
## Gold Rallies to Record Highs
Spot gold prices punched through previous highs, trading
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