- Summary:
- The FTSE 100 index is in a tight range after the meeting between Boris Johnson and EU's Leyen. The index will likely remain in the current range in the near term
FTSE 100 is set to open lower today after the unproductive meeting between Boris Johnson and Ursula von der Leyen. The two leaders failed to bridge the gap between the UK and EU on Brexit. Instead, they gave their negotiators until Sunday to reach an agreement.
The two sides have significant gaps remaining, especially on fisheries and fair-trade rules. This means that they will struggle to bridge this gap within days. For example, a country like France that catches as much as 50% of its fish from the UK will have difficulties accepting a bill that curtails this. Also, the UK does not want to appear as if it is giving too much.
A Brexit deal would be ideal for the FTSE 100 because it would leave things as they are. Without one, FTSE components like Tesco and Sainsbury warn that they will likely see higher cost of doing business. Similarly, other firms like Rolls-Royce and Meggitt would have significant challenges.
The FTSE 100 is also reacting to the latest UK GDP, manufacturing, and industrial production data. The industrial production rose by 1.3% while manufacturing fell by 1.7% in October as the country started issuing circuit breaker rules.
FTSE 100 technical outlook
On the four-hour chart, we see that the strong FTSE 100 rally has hit a barrier. The blue-chip index is trading at £6,565, which is slightly below this week’s high of £6,630.
The price is a few points above the 25-period and 15-period moving averages while the volatility, as measured by the ATR has fallen to the lowest level since October. Therefore, for today, unless major news comes out, the index will likely remain at the current range.
FTSE 100 technical chart
