The FTSE ended its streak of gains on Friday as it traded 0.05% lower. In the UK, the outcome of Brexit continues to face uncertainty however it seems that a no-deal scenario has been averted. The EU delayed its decision on granting Britain its requested extension to the date of withdrawal. Meanwhile, the UK parliament and PM Johnson tussle over the prospect of a general election which PM Johnson advocates for. On the global trade front, news suggest that the US and China are making progress and may finalize their phase one agreements. Brexit is likely to garner most attention as the EU has yet to announce its decision on a Brexit extension while the prospect of a general election remains uncertain. Traders should look to trade and Brexit headlines to influence market sentiment and dictate price action.
The FTSE lost 4 points to end at 7324 on Friday. The price failed to trade above the resistance at 7340 and turned lower towards the support at 7290 as the RSI reading eased off the overbought territory. Failure to hold above 7290 would lead to a pullback towards the 7250 support level near the 20-period MA. However holding above the 7290 level would leave the FTSE consolidating gains until a break above 7340 clears the bulls’ path towards the higher resistance levels at 7370 and 7400.
Resistance: 7340 /7370