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The FTSE 100 is holding this week’s rebound, +2.7% from a revisit of March lows, shifting from a 2-week end-May falling channel into a fresh rising channel to make for a positive start to the new month and quarter.
This is in spite of Trade tensions having ratcheted up a notch, President Trump now threatening his Mexican neighbours with tariffs on all goods unless the border is made more secure. He has also threatened China with yet higher tariffs in an effort to get Beijing to cede ground towards long-running trade negotiations with Washington.
Does this week’s 2.7% rally from the revisit of March lows have potential to make it all the way to 7379 May highs, another 1.5% upside? Does the current up-channel have legs? Will investors close the week risk-on, risk-off or undecided?
Bulls need a break above 7275 highs to extend the channel towards 7379 (1.5% upside).
Bears require a breach of 7230 to exit the channel and open the door for a retrace towards 7100 (2.2% downside).
Our watch levels: Bullish 7300, Bearish 7255
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