The FTSE 100 climbed to a three-month high, testing resistance near its April peaks at 10,697-to-10,724. A break above that band and the 20 February high at 10,745 would open the path toward February’s record. Meanwhile, the pound’s rally against the dollar is losing steam below its 200-day average.
The FTSE 100 is flirting with its April highs at 10,697-to-10,724, a band that IG says represents good resistance for the UK benchmark. Clear that zone and the 20 February high at 10,745, and the door opens toward the February record at 10,936.
FTSE 100 probes the ceiling
The index has cleared 10,700 for a four-month high on a busy day for UK deals. easyJet shares leapt 10% after it agreed to a £5.5bn bid from US private equity group Castlelake, while ITV is selling its media and entertainment business to Sky for £1.6bn.
The deal activity lifted several FTSE 100 names. IAG, the parent of British Airways, has jumped 45% from its lowest point this year, helped by the easyJet news and falling jet fuel costs. BAE Systems has moved from a year-to-date low of 1,582p to the current 2,021p ahead of a closely watched NATO meeting.
If the 10,697-to-10,745 region rejects the move, IG sees support between the May-to-June highs at 10,612-to-10,568. The near-term outlook stays bullish while the index holds above the 1 July low at 10,429.
Sterling loses upside momentum
The pound tells a different story. GBP/USD’s recent surge is losing momentum below its 200-day simple moving average at $1.3397, and support at the mid-May to early June lows of $1.3306-to-$1.3303 may be revisited.
Above that average, the 11-to-15 June highs at $1.3433-to-$1.3461 may act as resistance. A move above $1.3461 would turn the short-term forecast bullish, while the medium-term picture stays neutral with a bearish undertone within its $1.3140-to-$1.3658 March-to-May boundaries.
Sources: IG, Investors’ Chronicle, Invezz
Trading involves risk.
Risk Disclaimer
