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The UK 100 is back at the floor of a 2-week 6800-7000 shallow rising channel.
The culprit is a strong Pound Sterling, which hinders many UK Index members from a currency translation standpoint. If the shares pay a dividend in US Dollars, the stronger that GBP gets the less these payment are worth. And Sterling is back at November highs versus USD, embracing Westminster gridlock and hopes of a soft Brexit, or at least a no-deal Brexit being taken off the table.
US-China trade negotiations remain a risk when talks resume next week in Washington. The US government shutdown continues to paralyse many public sector activities. Brexit persists in teasing an already slower growing Eurozone.
Bulls need a break above 6860 to escape the sideways consolidation of the last few days and engineer a bounce back towards the ceiling. Bears require a break below the channel floor at 6800 to extend the recent sell-off from 7000.
Our watch levels: Bullish 6860, Bearish 6800
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Prepared by Michael van Dulken, Head of ResearchComments are closed.