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The UK 100 index trades just off its 7550 highs of the day, having added to (even accelerated) its late March reversal and recovery rally. Helping sentiment is fresh GBP weakness. This is derived from political uncertainty, both from a shift in Brexit influence within Theresa May’s Cabinet (replacement Home Secretary Sajid Javid being pro-Breixit while Amber Rudd, who resigned following an immigration scandal, is anti) and continued difficulties with the North Irish border. Helping further is a flurry of M&A and Miners (most) welcoming solid China PMI data.
Contributors: UK Index +30pts, with the biggest positive contributors being HSBC (extending rebound, optimism before Q1 results on 4 May), ULVR (second wind for rebound), SBRY (merger with Asda), WPP (Q1 not as weak, possible disposal), BHP /DGE (weaker GBP). Holding the index back are GLEN (DRC subsidiaries served freezing orders on royalties) and BP/RDSb (oil off highs).
Technicals: The UK 100 remains above 7500, extending its break above 7400, the rebound from 6840 and retrace towards 2018 highs of Jan/Feb’s record highs of 7800.
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The UK 100 remains above 7500, extending its break above 74000, the rebound from 6840 and retrace towards 2018 highs of Jan/Feb’s record highs of 7800.
Watch levels: Bullish 7550, Bearish 7500
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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