FTSE 100 at critical point ahead of a Q2 earnings season

FTSE 100
FTSE 100

The FTSE 100 index is wavering today as traders brace for a round of trading updates from its constituent companies. The index is trading at £6200, which is slightly higher than the intraday low of £6129. The index has done better than other European indices like the DAX index and CAC 40 that have dropped by more than 0.50%.

Brexit negotiations underway

The FTSE 100 index is gaining as the UK and EU start the sixth round of Brexit talks in London. While differences between the two sides are as wide as ever, there is a sense in which investors expect a sort of a deal before December 31st.

For one, Boris Johnson understands that the UK has more to lose in case of a no deal Brexit. That is because the country does more trade with the European Union than vice versa. The latest numbers show that the UK exports more than 47% of its goods to EU countries. The latter export only 4% to the UK.

In a statement yesterday, Michel Barnier, the Chief EU negotiator said that the bloc want a deal with the UK but “not at any price.” And in a recent statement, Boris Johnson said that the country will leave the EU under Australian terms if no deal was reached. Australia does not have a FTA deal with the EU but it has smaller deals.

A slew of Q2 updates

The FTSE 100 is wavering as traders brace for a slew of Q2 economic updates. Most companies in the index will publish their results in the coming few weeks. As we reported yesterday, Whitbread, said that its revenue declined by 79% in its Q1. And tomorrow, investors will pay close attention to Rolls Royce share price, because the firm will release its numbers. The share price is among the best-performer in the FTSE 100 today.

Other key companies to watch this week are Tryg, Investment Oresund, Suedzucker, Hembler, and Kitron among others.

Key movers in the FTSE 100

The best performing stocks in the FTSE 100 are the London Stock Exchange (LSE), Coca-Cola, Rolls-Royce, British American Tobacco, and Rentokil Initial. All these shares are up by more than 1%. On the other hand, the worst performers are HSBC Holdings, WPP, International Consolidated Airlines, and Burberry Group. These shares are down by more than 2%.

FTSE 100 technical forecast

The FTSE 100 is at a critical point as you can see in the daily chart below. The index is trading at £6127, which is along the 50-day exponential moving average and along the ascending trend line. This trend line connects the lowest points on May 14, June 15, and June 25.

Therefore, a break below this support will mean that bears have prevailed, which will see the price continue moving lower. However, a move above yesterday’s high of £6326 will signal that there are more buyers in the market, who will be keen to push the index higher.

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FTSE 100 technical forecast

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