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The UK 100 is back around its highs of the day, flirting with a breakout to confirm a bullish reversal from a poor start to the new week, month and quarter. Sentiment still dented by trade war concerns and political uncertainty. While the latter has reduced in Germany, it’s still alive in the UK, especially given Brexit’s potential impact on UK-EU trade. Trade jitters, however, could intensify and spread (Trump threatening WTO, China and Europe now), hurting global markets.
Contributors: UK Index +55pts, driven by BATS/GSK/ULVR/IMB (heavyweight, defensive), BP/RDSB (higher oil prices), HSBC/VOD (Bounce off lows), BLT/RIO (weaker USD, metals prices off lows) and BT (breakout). Preventing the index from a breakout are heavy declines for GLEN (US subpoena), depriving it of a whopping 16pts, and losses for MCRO (profit taking), Burberry (China exposure to trade war) and LLOY (press talk of £18bn more in PPI pay-outs).
Technicals: The UK 100 is making a bullish test of 7600, showing appetite for a breakout. Bullish triple-bottom reversal?
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The UK 100 is making a bullish test of 7600, showing appetite for a breakout. Bullish triple-bottom reversal?
Watch levels: Bullish 7610, Bearish 7590
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