The FTSE edged 0.09% higher on Monday as the EU granted the UK a 3-month Brexit extension. The relief of making progress as well as averting the possibility of a no-deal departure helped underpin global equities. However, PM Johnson lost his bid for a general election to opposing UK lawmakers and is now seeking to introduce a bill that bypasses the requirement for a supermajority vote from the parliament in order to approve the election. Thus, the uncertainty persists and would continue to weigh on Britain’s economy until the protracted Brexit is finalized once and for all. On the global trade front, news continue to suggest that the US and China are making progress and would agree to their phase one deal. Today look to Brexit developments to influence direction on the FTSE as sentiment has improved however remains fragile.
The FTSE barely notched above the 7340 resistance level before closing 6 points higher at 7331 on Monday. Today, look for price to show a sustained move above the 7340 resistance to enable gains towards the resistance levels at 7370 and 7400. Failure to hold above 7340 would leave the FTSE ranging lower , with a decline below 7290 required to indicate weakness and target the 7250 support level.
Resistance: 7340 /7370