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The UK 100 is slightly offside today, but still positive for the week, potentially consolidating before the next leg higher within a 7/8-week rising channel. Small losses are in spite of what is normally helpful GBP weakness (EU customs backstop agreed, BoE scared off from rate hike), exacerbated by additional USD strength (US 10yr bond yields >3%, Fed hiking) that is causing oil to pause and putting pressure on Metals and Miners. Blame can also be pinned on disappointing results for heavyweight AstraZeneca and some profit taking in certain names following strong rallies, perhaps fuelled by geopolitical rumblings (NK, US, Italy) although not enough to cause panic.
Contributors: UK Index -10/15pts, held back most by AZN (Q1 results miss), RDSB (oil off highs), VOD (continued CEO change concerns), Miners (strong USD hurting metals; ignoring weak GBP) and RBS (profit-taking). Serving as a buoyancy aid are ULVR (rebound, defensive, weak GBP), HSBC (ex-div recovery, share buyback), RELX (extending uptrend) and CRH (weak GBP, bullish flag pattern?).
Technicals: The UK 100 remains in a 7-week rising channel toward 4.5ry rising resistance at 7885, but a meaningful break above Jan’s 7805 record high is required before the next leg higher. Bullish pennant forming?
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The UK 100 remains in a 7-week rising channel toward 4.5ry rising resistance at 7885. A meaningful break above Jan’s 7800 record high is, however, required before the next leg higher. Bullish pennant forming?
Watch levels: Bullish 7805 (Jan record highs), Bearish 7750 (7-week rising support)
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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