FTSE Higher As CPI FallsThe FTSE is seeing a wave of strong buying today in response to the latest UK inflation data this morning. UK CPI was seen falling last month, with headline CPI cooling to 7.9% from 8.7% prior, below the 8.2% the market was looking for. Core CPI, which strips out the more volatile components, was also seen falling to 6.9% from the prior and expected 7.1%. Following an unexpected rise in the prior month’s data, this latest set of inflation readings has fuelled hope that the UK will be able to avoid the need for more aggressive tightening on the back of a further projected hike this month.Market ReactionThe market reaction has been very convincing. Yields on UK government bonds have tumbled this morning with the 2 and 10 year yields falling around .25% and .15% respectively. The FTSE is up over 1% on the day while GBP is being firmly sold. Looking ahead this week, UK retail sales on Friday will be the next key data point for UK markets with GBP likely to stay pressured on the back of today’s data, keeping the outlook bullish for the FTSE near-term.Technical ViewsFTSEThe brief move sub 7337.6 is now quickly reversing with the market fast approaching a test of resistance at the 7678.8 area. With the bear channel top sitting just above, this is a key area for the market and will be a major test for bulls. If bulls can get above here, 7834.7 will be the next topside level to note ahead of 8023.5 above.