FTSE 100 hovering around 6500 as BoE’s Haldane warns of record labour market inactivity

FTSE 100 closed 0.18% into the red today, as the buyers are consolidating last week’s gains around the 6,500 mark. The buyers have now recovered around 60% of the corona-related losses despite the Bank of England’s (BoE) chief economist Andy Haldane issuing a warning that the UK is facing record inactivity in the labour market. 

Fundamental analysis: 8 million people underemployed 

The United Kingdom is facing historic levels of inactivity in the labour market as a result of certain parts of the economy collapsing amid the COVID-19 outbreak, according to Haldane.

The Bank of England is expecting the unemployment rate to double to around 9% this month as a result of the COVID-19 outbreak and lockdown measures introduced to stop the spread of the virus.

Despite the fact that global equities have engaged in a rapid recovery, Kingswood is calling for investors to be cautions .

FTSE 100 closed into the red today, mainly due to the poor performance of one of its biggest companies, AstraZeneca PLC (-3.2%).

Technical analysis: Buyers approaching critical resistance

A new 3-month high has been printed today in FTSE 100, as the price action finally managed to trade above 6,500, albeit briefly. The distance to the critical resistance around 6,540 is now close with the buyers hoping to tag this level as soon as tomorrow.

The zone around 6,540 is a multi-year low for the FTSE 100. Once broken, it accelerated the downturn in March. Hence, we may expect this resistance to play an important role and maybe facilitate a rotation lower. The area around 6,400 should provide immediate support for the buyers. 

Summary

FTSE 100 ended the day in the red as the buyers took a step back to consolidate impressive gains made in the past few weeks. Separately, the BoE’s Halden warned that the labour market is facing record levels of inactivity due to the COVID-19 outbreak.