The FTSE100 finished firmly in the red yesterday amid a stronger pound which appreciated after the UK and EU agreed a draft text outlining a close post-Brexit relationship. The strong rally in the pound caused the FTSE to fall because the majority of components are multinationals, penalized by a strong pound. Theresa May said the agreement of a political declaration on the UK's post-Brexit relationship with the EU is "the right deal for the UK" and reflects the will of the 52% majority who voted to leave the bloc. May added that she spoke to Spain's prime minister and is confident of finding "a deal that delivers for the whole UK family, including Gibraltar".
The UK index broke slightly below the key technical support level at 6970 again crossing the 20-period moving average. It looks like the next target is the 6865 support as the bears are taking control of this market. With prices trading close to this year's low at 6851, downside momentum might accelerate should the Footsie break out to new lows for the year. The trend is still clearly bearish, showing an intact downtrend in the short, medium and long-term.
Support: 6970 / 6855
Resistance: 7040 / 7115