- 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.
- 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
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.
- 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