Monday, September 2, 2019



Fundamental Highlights

The FTSE traded 0.32% higher on Friday supported by trade hopes as the US and China would reportedly resume negotiations. However, the latest round of US-China tariffs went into effect on Sunday and may inspire risk averse flows on the day as it is telling of the unpredictable nature of trade developments. Meanwhile in the UK, PM Johnson faces challenges over his decision to suspend parliament as members seek to ensure a no deal Brexit scenario is averted while the pound remains under pressure. Expect Brexit headlines to dictate the pound’s direction which could in turn affect London’s blue chip Index which benefits from a weaker domestic currency. Moreover, markets should monitor US-China trade headlines as it remains a key driver of price action.

Technical Analysis

The FTSE extended gains by 22 points to end at 7207 on Friday. The price managed to trade above the 20-day MA at 7185 and tag the resistance at 7235. Today, look to the 7185 level to provide near term direction on the FTSE, as a decline below that level should find support at 7150. Holding above the 7185 level would maintain buying pressure with a break above 7235 required to target the higher resistance at 7300.

Support: 7180/7150
Resistance: 7235/7300

Chart (H4)