FxWirePro Medium Term Outlook: Buy FTSE at dips targeting 8100

In our analysis, we found that since the UK referendum in June, in terms of economic numbers, there have been 26 key releases. Out of which 50 percent can be considered as good, 35 percent can be considered as bad and only 15 percent can be considered as ugly. Out of the group that is bad, 67 percent are from the housing sector. So it is only fair to say that the UK economy is doing much better than expected. There could be downturns in the housing sector but that is too early to be confirmed.

So, what we have in our hand,

• In short, UK economy is doing much better than expected.
• The Bank of England (BoE) has unleashed an ambitious easing package and will do more if needed. The corporate purchases would ensure lower credit spread for corporates and the targeted loans should keep the credit flowing in the economy.
• The government is also having fiscal plans to support the economy, which would be announced in the autumn statement in November.
• The lower exchange rate is helping exporters.

All these above factors are beneficial to the FTSE100, hence we expect the index to move higher.

Trade idea:

• FTSE is currently trading around 6680 area, buy FTSE at dips around 6500 and below with a target around 8100 area.