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Although the UK Index looks to close out the week +40pts, we are trading around the floor of a week-long 6975-7075 range. Why? Traders are factoring in the risk of little-to-no progress on the trade war resolution front, despite President Trump and Chinese counterpart Xi organising a tete-a-tete at the G20 in Argentina.
Banks and Housebuilders are hurting from disappointing house price data and negative Brexit headlines, as the PM May struggles to convince fellow MPs to back her EU Withdrawal deal. Miners are suffering into the weekend from weak overnight China macro data, where the key Manufacturing sector gauge fell to its lowest in 10 months, teetering on the edge of contraction.
Bulls will be looking for a rebound back above 7000 for a fresh challenge of channel ceiling. Bears require a break below 6975 to undo this week’s gains and open the door for a decline to 6930.
Our watch levels: Bullish 7000, Bearish 6975
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Prepared by Michael van Dulken, Head of ResearchComments are closed.