- Global equity averages have retained their short-term positive outlooks from the strong rallies at the start of June, consolidating these recovery efforts over the past week.
- The UK benchmark stock average, the FTSE 100 is in similarly positive mode, but also bolstered by Sterling weakness against the US Dollar and Euro (GBOUSD low and EURGBP higher)
- The weakness in GBP is positive for the FTSE 100 as many of the corporates in the index earn profits overseas, notably in US Dollars and Euros, and Sterling weakness improves revenues and profitability.
- This sets the risks for the FTSE 100 to the upside today, this week and into the second half of June.
FTSE 100 positive bias
A dip and a bounce Monday from just above Friday’s setback low at 7316.5, sustaining upside pressures from the June recovery, keeping the bias higher for Tuesday.
The June push above 7360.5 set an intermediate-term range we see as 7474 to 7069, BUT with risks growing for an intermediate-term bullish shift above 7474.
- We see an upside bias for 7401 and 7420; break here aims for 7440/43, even key 7474.
- But below 7341/40 opens risk down to 7316.5, which we would look to try to hold.
Intermediate-term Range Breakout Parameters: Range seen as 7474 to 7069.
- Upside Risks: Above 7474 sets an intermediate-term bull trend to aim for 7500 and 7625.5.
- Downside Risks: Below 7069 sees an intermediate-term bear trend to target 6943 and maybe 6587.
Resistance and Support: