The FTSE 100 index dipped on Tuesday by 0.50% but the strong two week bull run should ensure that one more push higher to test 6500 is possible. The FTSE is lower on a stronger pound and Brexit fears.
After EURGBP traded to 0.9290 on November 7th, the pound has since strengthened to see the pair at 0.9875. This puts pressure on exporters in the U.K. and has taken some steam out of the stock market. Sterling also remains bid against the U.S. dollar with a three-week bull run threatening a further advance.
Brexit talks have continued this week in Brussels with no real progress seen since Boris Johnson’s supposed deadline of mid-October. The EU27 countries were scheduled for a virtual meeting on Thursday and it was hoped that a deal would be seen before then in order to have it approved by member states. The British media are suggesting that the chief Brexit negotiator David Frost has told Prime Minister Johnson to expect a trade deal with the EU “early next week”.
If a deal is secured then we can expect support for the FTSE and pound crosses, however, the U.K. share index is currently higher than it was way back in June 2016 when the referendum results came through.
The FTSE 100 has rallied strongly after finding support at the 5515 level. The index charged through a downtrend resistance line and the 6,000 level to hit 6400. The key resistance is at 6500 and a move above could see a new trend develop to the upside. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
