The FTSE surged by 1.04% on Monday and outperformed European indices as further declines in the pound due to Brexit concerns and weak manufacturing activity in the UK supported the internationally exposed index. In the UK, political turmoil persists as PM Johnson faces opposition from parliamentary members who seek to ensure the legislative prevention a no-deal Brexit scenario. Today, look for further Brexit developments to dictate the pounds direction which normally opposes that of the FTSE’s. Apart from Brexit, traders should monitor US-China trade headlines as it remains a key driver of price action.
The FTSE opened higher on Monday as it gained 74 points to end at 7281. It is worth noting that price recorded an intra-day high of 7315 which represents the resistance level to be broken if the FTSE is to target the 7345 level followed by the higher resistance around 7380. Thus look for price to trade above yesterday’s high at 7315 to enable further gains. Meanwhile, Failure to hold above the support at 7235 would indicate selling pressure and lead the FTSE towards the lower support levels at 7200 and 7180.