The FTSE 100 index is down by 0.25% in the futures market ahead of major events from the United Kingdom. It is trading at £6,495, which is a few points below last week’s high of £6,630.
What happened: The biggest concern for the FTSE 100 index is the ongoing Brexit crisis. In a statement yesterday, Boris Johnson and Ursula von der Leyen asked their teams to continue negotiating as a deal remains elusive. As such, investors are concerned about whether the two sides will ultimately reach a deal.
What else is happening? This will be an important week for the FTSE 100. For one, the Bank of England will deliver its interest rate decision. Most analysts believe that the bank will leave rates unchanged and possibly warn about the impact of a no-deal Brexit.
In addition, there will be several important earnings from the UK, including Purplebrick, Serco Group, Watches of Switzerland, and Dixons Carphone, among others. Most importantly, investors will watch out for the stimulus talks from the United States. A likely deal will be a positive thing for the FTSE 100 and other global stocks.
What about the sterling? The FTSE is also possibly falling because of the stronger sterling. The pound rose by more than 1% in early trading in response to Brexit. A stronger pound is usually a negative thing for FTSE constituents.
FTSE 100 forecast
What next for FTSE 100? The four-hour chart shows that the FTSE 100 index has been in a tight range recently. It also shows that the index has formed a double top pattern at last week’s high of £6,630. It remains along the 25-day exponential moving average and slightly above the 50-EMA. Therefore, the index could continue struggling as bears aim for support at £6,500. However, a move above £6,630 will mean that there are still more buyers.
FTSE 100 technical chart