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The UK 100 is ebullient, ending the trading week 0.9% higher after a strong 2-day rally that took the blue-chip index +2.7% from this week’s 6796 lows. Moreover, this has taken the index’s YTD gains to +3.7%.
Much of the advance can be chalked up to a weak Pound Sterling, which fell on weak UK Retail Sales that missed market consensus. But weak GBP isn’t the entire story.
The UK Index has also been helped by oil extending its reversal rally to fresh 5-week highs. Positive headlines on US-China trade negotiations are also boosting heavyweight Miners and other Asia-exposed names. Banks, Financials and other risk/growth assets are also embracing the general risk-on sentiment.
Bulls need a break above last Friday’s 7000 highs to cristalise the bounce and attempt a challenge of Oct-Nov falling highs around 7065. Bears require a break below 6940 Tuesday highs to undo today’s breakout and reverse at least some of this week’s gains.
Our watch levels: Bullish 7000, Bearish 6940
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Prepared by Michael van Dulken, Head of ResearchComments are closed.