The FTSE posted sharp gains on Tuesday as it rose 0.85% led by the energy sector due to the recent surge in oil prices. Moreover, weakness in the sterling further aided the lift in the Footsie as Brexit resumes its course of uncertainty and Parliament has yet to agree on the UK’s manner of departure from the EU. The FTSE should continue to head upwards alongside a weaker pound as the index has shown insensitivity towards Brexit developments.
The FTSE managed to break out of the resistance zone around 7470/7480 to end at 7523 on Tuesday. The RSI reading has entered the overbought territory following yesterday’s surge, however bullish momentum may uphold buying pressure and consolidate gains before edging towards the 7540 level. Failure to do so will leave price ranging above 7480, from which a decline below would signal a lower move towards the 20 period MA followed by immediate support around 7440.
Support: 7480/ 7440
Resistance: 7540/ 7580