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The UK Index this week – 25 Jan

The UK 100  is back at the floor of a 2-week 6800-7000 shallow rising channel.

The culprit is a strong Pound Sterling, which hinders many UK Index members from a currency translation standpoint. If the shares pay a dividend in US Dollars, the stronger that GBP gets the less these payment are worth. And Sterling is back at November highs versus USD, embracing Westminster gridlock and hopes of a soft Brexit, or at least a no-deal Brexit being taken off the table.

US-China trade negotiations remain a risk when talks resume next week in Washington. The US government shutdown continues to paralyse many public sector activities. Brexit persists in teasing an already slower growing Eurozone.

Bulls need a break above 6860 to escape the sideways consolidation of the last few days and engineer a bounce back towards the ceiling. Bears require a break below the channel floor at 6800 to extend the recent sell-off from 7000.

Our watch levels: Bullish 6860, Bearish 6800

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.


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Prepared by Michael van Dulken, Head of Research

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