The Footsie fell 0.42% on Monday as the case for UK’s withdrawal from the EU remains unclear. It is a critical week for Brexit as Wednesday presents indicative votes served to narrow parliament’s sentiments to a majority rule on an alternative to PM May’s deal which hasn’t garnered enough support to be put to another test. However, PM Theresa May has stated that she cannot commit to delivering the outcome of the votes which may prove the event to be indefinitely consequential and leaves a no-deal scenario likely. A steady pound and cautious sentiment ahead of Wednesday’s votes is likely to keep a lid on FTSE’s gains.
The FTSE extended retracement on the uptrend which drove price to the support at 7150 before ending at 7177. Holding above the support at 7150 level could turn the index higher as it may confirm a hidden bullish divergence as price has formed a higher low while the RSI fails to correspond and formed a lower low. Failure to sustain above the 7150 level should drive the index to lower support levels with a trade through the 7080 level required to negate the uptrend.
Support: 7150/ 7110
Resistance: 7220/ 7260