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The UK 100 is making a bullish test of recent 7729 highs (breakout imminent?) thanks to high Oil prices helping heavyweight Energy names extend recent breakouts, and GBP remaining under pressure (good for those with international earnings and paying dollar/euro dividends). The latter comes partly from fresh USD strength (US Treasury yields comfortably above 3%), even this keeps a lid on dollar-denominated metals, but also from persistent UK political uncertainty, especially regarding Brexit. This beneficial combo (Oil and FX) is easily offsetting damage from a negative reaction by shareholders to news of heavyweight telecom Vodafone’s CEO leaving later this year.
Contributors: UK Index +20pts; driven north by RDSb/BP (high oil, extending breakout, weak GBP), BATS/DGE (weak GBP), HSBC (Asia optimism, share buyback) and SHP (closing takeover bid gap). Hampering its progress today is VOD (CEO succession), AAL/GLEN/RIO (Strong USD on metals) BT (resumed downtrend) and GSK.
Technicals: The UK 100 is trying to break above recent 7730 highs to extend its 7-week uptrend channel towards 7800.
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The UK 100 is trying to break above recent 7730 highs to extend its 7-week uptrend channel towards 7800.
Watch levels: Bullish 7740, Bearish 7720
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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