The FTSE was the outperformer amongst European Indices as it surged by 1.8% on Tuesday. A steep decline in the pound due to growing concerns over the prospect of a no-deal Brexit under the new PM Boris Johnson propelled the FTSE higher. Moreover, positive corporate updates lifted shares of FTSE’s members sharply higher. Today, continued weakness in the pound should keep the FTSE afloat while markets monitor US-China trade headlines for updates ahead of tomorrow’s critical FOMC meeting.
The FTSE posted a sharp gain of 137 points to end at 7686. A plunge in the pound enabled the FTSE to overcome July’s previous high at 7620 and record a high of 7711. The RSI reading indicates the index is within overbought territory and may turn lower should bullish momentum stall. Look for a sustained move below 7670 to target the lower support at 7638 followed by 7620. Meanwhile a sustained move above the 7700 mark would allow the FTSE to advance towards the higher resistance at 7470.