As Brexit remains a work in progress, UK’s Prime Minister Theresa May attended the EU summit last week in an attempt to reach concessions that would win over the UK parliament, to which EU officials responded that renegotiations would not occur. Moreover the Irish backstop policy essentially seeks to maintain an open border between the UK and Ireland which inevitably puts into question the controversial ties that the UK would have to abide by with the EU in order to ensure smooth relations. While May continues to refine a Brexit deal to appeal to UK lawmakers, a parliamentary vote which was due on December 11th has yet to be rescheduled in 2019. Apart from UK’s political turmoil, with Footsie’s commodities stocks’ exposure to worldwide markets, China’s economic status and relations with the US will be on the spotlight as it weighs heavily on the Index.
The blue chip index broke below the Bollinger band on Friday and overall slipped 0.47% ending at 6845.17. Should it sustain the break, continuing to bounce off the 20MA at 6836, signaling a move to the downside, it would put further support levels back in focus. As the near term outlook is relatively choppy, trading above 6842 may indicate a ranging period whilst testing key resistance level above 6909.
Support: 6784/ 6720
Resistance: 6908 / 6950