FTSE 100 surges as the Pound plunges amid resuming Brexit concerns

Intermediate
  • The FTSE 100 leapt higher Friday helped by a weakening GB Pound in the midst of renewed concerns regarding a more likely No Deal Brexit and with the current Conservative Government under Prime Minister Theresa May looking more fragile.
  • GBPUSD was technically weakened by Friday’s selloff, leaving risks still lower for late September (and beyond).
  • In addition, the already recovering FTSE 100 was boosted by a strong recovery on Base Metals markets, as we featured in our last report here
  • These factors leave the bias higher for the FTSE 100 into the end of Q3 (and on into October).

FTSE 100 (Dec’ ’18 contract)

Intermediate-term upside threat

We have stated in recent reports that “we see an intermediate-term bear trend, BUT the strong risk is for a push above 7353 to shift the intermediate-term view to neutral” and the surge above here on Friday sets an intermediate-term range theme defined as 7488 to 7184 with the risks skewed towards a bullish above 7488.

Furthermore, the very strong advance on Friday sustains a solid recovery theme into Monday.

For Today:

  • We see an upside bias for 7465.5; break here aims for key 7488 and then 7500, maybe 7526.
  • But below 7405 aims at 7386 and then opens risk down to 7343.

Intermediate-term Range Breakout Parameters: Range seen as 7488 to 7184.

  • Upside Risks: Above 7488 sets a bull trend to aim for 7596, 7701 and 7779.
  • Downside Risks: Below 7184 sees a bear trend to target 7054.5 and 7000.

4 Hour Chart

ftse100 future

GBPUSD

Back to an intermediate-term range theme

A plunge back lower Friday to prod the key 1.3055 level has quickly shifted the intermediate-term outlook back to an intermediate-term range theme.

Tis bearish shift also sets the bias lower for Monday.

For Today:

  • We see a downside bias for 1.3054; break here aims for 1.3025, 1.2979 and then maybe 1.2919.
  • But above 1.3102 opens risk up to 1.3162, maybe 1.3198.

Intermediate-term Range Breakout Parameters: Range seen as 1.3299 to 1.2894.

  • Upside Risks: Above 1.3299 sets a bull trend to aim for 1.3363, 1.3473 and 1.3618.
  • Downside Risks: Below 1.2894 sees a bear trend to target 1.2784, 1.2661 and 1.2500.

4 Hour Chart

GBPUSD 4 hour chart

 

Steve Miley

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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