FTSE 100 started higher today after yesterday’s election. The Conservative party and Boris Johnson secured a clear majority and that opens the way for the much anticipated Brexit. Borris Johnson in his speech said that the UK will leave the European Union on January 31st.
Stocks around the globe cheered yesterday the reports that U.S. and China are close to a phase one trade deal. The deal will cancel the new tariffs scheduled for December 15th. USA will also reduce by 50% the existing tariffs on 360 billion Chinese products. On the other hand China will increase the purchases of U.S. farm products in 2020.
Pound at 12 Month Highs
GBPUSD run an impressive rally after the exit polls and as of writing trades at 1.3421. A stronger Pound might cap the FTSE gains as most of the companies included in the index derive their earnings from international trading.
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FTSE 100: Bulls in Control
FTSE 100 technical outlook has now turned positive as the index breached early in the morning above the 200-day moving average and makes fresh three-week highs. I wrote yesterday about the hammer pattern formed in daily FTSE chart that might signal a bullish reversal for the index., and that is the case today.
Traders attention has turned to the upside, FTSE needs a close above the daily top at 7,413 that will give more confidence to bulls in an attempt to the next resistance at 7,446 the high from November 27th. If the FTSE manages to break above that level then the way will be open for the next target at 7583 the high from August 2nd.
Traders focus is on the downside, where the first support stands at 7,195 the daily low. A break below that level might push the FTSE 100 index for a test of yesterday’s low at 7,139 a level that successfully provided support the last two weeks. The October lows might be the next area of support around 7,063.
Global Equities Risk On Mood
European indices also trading higher today, the Dax 30 is 1.31% higher at 13,395 the CAC 40 in Paris trading 1.14% higher at 5,951. In Milan, the FTSE MIB is 0.9% higher at 23,611.
In New York stock futures are trading higher, the Dow futures are 0.43% higher at 28,252, the S&P 500 futures are 0.42% higher at 3,184 while the Nasdaq futures are 0.53% higher at 8,536 signalling a bullish start for stocks in the other side of the Atlantic.
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