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UK blue-chips may have rallied back for a retest of 7220 highs, but they have already turned back. This means that a meaningful test/breakout, to reverse some of this week’s weakness, remains elusive. The rally this morning was fuelled by GBP coming off its highs, easing some of the hindrance that held the index back yesterday’s, after UK wage growth failed to accelerate as much as expected, easing the inflationary read-across, even if unlikely to prevent the BoE from hiking the UK base interest rate in May (BBG suggests 85% probability). Miners digesting mixed China GDP.
UK 100 higher thanks to RDSb/BP (weaker GBP), ABF (H1 results), HSBC (small gains but heavyweight), LLOY (UK rate rise good for banks), TSCO (still benefiting from recent results), SHP (oncology division sale, M&A) and EVR (rebound after sharp sell-off), all adding at least 1pt. Holding the index back are the likes of RB (concerns ahead of Q1 results; Credit Suisse downgrade), BATS (defensive) and RR (US limits some use Boeing 787s using Rolls Royce Trent 1000 engines).
The UK Index 100 is already giving up some of this morning’s rally from 7190-7220, still stuck in a sideways channel just above longer-term rising support (from March lows) at 7175. Where next?
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The UK Index 100 is already giving up some of this morning’s rally from 7190-7220, still stuck in a sideways channel just above longer-term rising support (from March lows) at 7175? Where next?
Watch levels: Bullish 7225, Bearish 7190
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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