The FTSE was the outperformer amongst European indices as positive corporate updates from its constituents alongside a tumbling pound helped the index surge by 0.93% on Thursday. On Brexit, uncertainty persists as the EU refrained from approving of an extension when discord arose amongst UK lawmakers and PM Johnson on his avocation for a general election. Market participants are now awaiting news on whether the EU would grant Britain an extension of the October 31st deadline. Should the pound remain weak today, then the FTSE should remain buoyed and consolidate its recent gains. Traders should look to trade and Brexit developments to influence sentiment and direct price action.
The FTSE closed 67 points higher at 7328 on Thursday. The price has been drifting higher since finding support at 7139 on Monday and managed to surge above the resistance at 7250 to record a high of 7338 on Thursday. The 4H RSI reading is currently hovering around the overbought threshold suggesting that the index may turn lower. Unless we see price respect the resistance at 7340, there is a chance the FTSE makes further advancements towards the resistance zone of 7370/7380. Failure to break above yesterday’s high would lead price lower towards the immediate support at 7290.
Resistance: 7340 /7370