The Footsie gained ground on Monday alongside the sterling as it rose 0.37% despite the uncertainty Brexit presents in today’s meaningful vote. It was announced that PM Theresa May managed to secure a better deal with the EU ahead of today’s parliamentary vote, however should the parliament reject the deal, they are set to vote later in the week on ruling out a chaotic no-deal Brexit. Though this may come off as good news for the British economy and bolster strength in the pound, it may have the reverse effect on the internationally exposed FTSE which normally benefits from a lower domestic currency. Nonetheless, a smooth Brexit means another global headwind out of the way and improved market sentiment. On the data front, Investors will watch for UK’s GDP figure and manufacturing data.
The FTSE drifted slightly higher on Monday however managed to close below the 7150 level whilst holding above the 100-period MA. The price would have to break through the 100-period MA around 7080 to reinforce a bearish outlook on the index, while a trade through the resistance at 7220 would be needed to bring into view the high at 7260. Price may consolidate within a range of 7180-7080 as investors lack direction ahead of today’s Brexit vote.
Support: 7080/ 7000
Resistance: 7180/ 7220