This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
The UK 100 has extended its bounce above 7700 thanks to a weaker USD benefiting metals and Oil and thus Miners, and Energy. General risk appetite also sees the Banks off their lows as the fears of late recede (Italy, Spain, Trump, trade) with the aggregate being more than enough to overpower unhelpful GBP strength which has a negative transnational impact on both foreign earned profits and dividend income.
From where does this GBP strength hail? Hawkish comments from ECB members helping the EUR outperform vs major pairs. With the single currency making up 57% of the widely watched trade-weighted Dollar index, this is keeping downward pressure on the US currency, in turn helping the UK’s Sterling.
Contributors: UK Index +40pts, driven north by the RIO/GLEN/AAL/BLT (weaker USD helping metals like Copper up along side supply concerns), BP/RDSB (Brent crude off lows), Banks (risk appetite, rebound from lows) and IAG (bounce from channel floor, oil off highs). Offering limited resistance are the usual suspect defensives BATS/ULVR/IMB/GSK/RB all hurting from GBP strength.
Technicals: The UK 100 has broken out from its 3-day falling channel. Bulls need a break above 7730. Bears require another break below 7700
Click below to expand sections for more detailed analysis
The UK 100 has broken out from its 3-day falling channel. Bulls need a break above 7730 highs of the day; Bears require another break below the 7700 it overcame this morning.
Watch levels: Bullish 7730, Bearish 7700
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.
Click here for help with Support & Resistance Click here for help with technicals
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research