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The UK Index is off its worst levels, in a fresh rising channel (albeit short-term) trying to kick off a bullish reversal following the recent 2.7% correction. Global trade concerns remain the dominant theme with uncertainty abound, although some soothing words from the Trump Administration, with Trade Advisor Navarro trying to water down some of the tweets from Trump and Mnuchin. A weaker GBP is also helping the UK Index ‘s heavyweights, a combination of USD rebound and contrasting comments from outgoing perennial MPC hawk McCafferty and incoming Haskell. So too are oil prices holding off their lows, to help Energy names.
Contributors: UK Index +25pts, with most help coming from the likes of BP/RDSB (oil off lows, heavyweights), GSK/RB (defensives, bounce), HSBC/AZN (heavyweights, bargain hunting), BATS/DGE (weaker GBP) and ULVR (momentum). The biggest drag this morning comes from OML (un-suspended after IPO of wealth management arm Quilter), VOD (downtrend), CPG profit taking), IAG (higher oil, Heathrow runway 3 approval) and GLEN (trade concerns, low copper price).
Technicals: The UK 100 is in a new short term rising channel. Bulls hope this is act one of a reversal towards 7700. Bears hope it’s a bearish flag before another 200pt drop.
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The UK 100 is in a new short term rising channel. Bulls hope this is act one of a reversal towards 7700. Bears hope it’s a bearish flag before another 2-3% drop.
Watch levels: Bullish 7560, Bearish 7530
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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Prepared by Michael van Dulken, Head of Research