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The UK 100 is just above breakeven, making for an uncertain start to the week. 30pts shy of overnight highs we are also 30pt off this morning’s lows and, importantly, holding last week’s rebound from July Lows. Trade concerns continue to buffet market sentiment, with the US and China taking turns to threaten further tariffs. Fresh GBP weakness is a help, a product of both a possible no-deal Brexit and USD strength, itself derived from an safehaven seeking (world reserve currency), the Fed hiking and China’s renminbi weakening.
Contributors: UK Index +10pts, helped higher by BP/RDSB ( higher oil prices), GSK/BATS/ULVR/DGE (defensive, momentum, weak GBP), SHP (Takeda shares higher in Japan) and VOD (extending rebound). Holding it back most are the Miners (stronger USD, lower metals prices, trade war concerns, profit taking), RBS (profit taking) and HSBC (results).
Technicals: UK 100 near apex of narrowing pattern, deciding whether uptrend or downtrend will prevail.
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UK 100 near apex of narrowing pattern, deciding whether uptrend or downtrend will prevail.
Watch levels: Bullish 7695, Bearish 7636
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