The Footsie ended 0.45% higher on Friday as upbeat news surrounding Sino-US trade progress helped buoy global sentiment. On the domestic front, Brexit uncertainty continues to weigh on UK’s economic outlook ahead of a key parliamentary vote later next week. However, UK Prime Minister Theresa May was given a Brexit boost as key Tories signalled swinging behind her stance in exchange for movement on the Northern Irish backstop. Nonetheless, multinationals in the FTSE index rely on growth beyond the UK for support, thus US-China trade relations will continue to dominate market sentiment while a steady pound may limit gains on the FTSE.
The FTSE index failed to extend to the downside following last week’s break of the support at 7060, and ended at 7106 on Friday. While bearish bias remains intact with an RSI reading in negative territory, a trade through the 7150 level coinciding with the 50-period MA could signal an upside move. Meanwhile price would need to break below the 7060 level to reinforce bearish pressure and suggest a move towards the trend line support at 7000.
Support: 7000/ 6910
Resistance: 7170/ 7260