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The FTSE 100 has extended its January rally by another 60 pts into the first week of February. That said, the benchmark index is also 110 points (-1.5%) off Thursday’s 7188 peak, having encountered resistance in the form of November’s highs.
Much of this week’s rally was courtesy of Energy names (BP’s outstanding results pulling the sector higher) and Miners (iron ore prices at 2-year highs after a mining disaster in Brazil). Sterling’s gyrations following conflicting Brexit headlines, however, are now providing too much of a drag, resulting in a some risk-off trading into the weekend.
Bulls need a break above 7100 to revive the uptrend from 2.5yr lows. Bears require a breach of 7000 to extend the reversal towards the post-Christmas rising channel floor.
Our watch levels: Bullish 7100, Bearish 7050
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