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As we move into the weekend the UK 100 is bouncing from another flirt with round number 7000, albeit still stuck in what is now a week-long sideways channel with a 7000 floor and 7100 ceiling.
Uncertainty remains with regards to UK politics and Brexit, which could yet move GBP next week with a knock-on for index of internationally exposed and currency sensitive UK blue-chips. What the weekend delivers for the PM could mean we open significantly higher or lower come Monday morning.
Bulls need a break above 7050 to regain the upper half of said channel and for another test of the 7100 ceiling. This may require a bout of GBP weakness to help engineer it, which may depend on the Brexit/Westminster outlook.
Bears on the other hand still have their eyes on that 7000 floor, eager to see another downside test that could open the door for a drop towards late October’s 6850 flirt with 2018 lows. Before that they need to see this bounce reverse through 7020.
Our watch levels: Bullish 7050 (channel mid-point), Bearish 7020 (to reverse this bounce and 7025 breakout)
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