The FTSE traded 0.46% lower on Monday as trade optimism fades and hopes of a Brexit deal were clouded by comments from EU officials prompting PM Johnson to hasten his process in order to secure a deal ahead of the EU summit on Thursday. Moreover, news on China’s reluctance to sign the trade agreement made last week with the US robbed the bulls of their control. In order for the FTSE to continue its move higher, we would have to see a positive flow of headlines regarding Brexit and the US-China trade situation. Apart from geopolitical news, the UK publishes employment data which is skewed to the negative. In the case that the data disappoints and the pound weakens, we may see the FTSE take advantage and find support off of a lower domestic currency.
The FTSE failed to edge above the resistance at 7250 and turned lower to find support around 7200 before ending 33 points lower at 7213. Should the support at 7200 hold, then price should edge higher with a break above 7250 required to form a higher high. However, a decline below 7200 would signal further weakness towards the lower levels of support at 7170 and 7150.
Resistance: 7250 /7270