FTSE 100 Retests 5-Month Highs Ahead of Christmas

FTSE 100 traded higher in yesterday’s trading despite concerns about a no-deal Brexit. The UK’s blue-chip stock index opened at 7,582.6 and rallied to a high of 7,644.1 before it closed at 7,630.1. As of this writing, the stock index is hovering at today’s open price around 7,631.8.

Gainers and Losers on FTSE 100

The stock index may have benefitted from the pound’s weakness which was weighed down by concerns of a no-deal Brexit. Remember that UK products and services become more appealing to foreign customers because a weak pound makes them relatively cheaper. Gains were led by Fresnillo at 2.41%. Meanwhile, Ocado Group came in second at 1.80%. In third was Just Eat PLC at 1.64%.

On the other hand, losses continued to be led by NMC Healthcare at -6.52% as allegations of financial management by the company continued to weigh down the stock. BT Group PLC was also down by 2.36% and Evraz rounded up the top three losers in yesterday’s trading at 2.21%.

No-Deal Brexit for the UK?

Earlier last week, the UK parliament voted in favor of Prime Minister Boris Johnson’s Brexit deal. This means that the country’s divorce from the European Union will begin in January 31, 2020 and will need to end on December 31, 2020. Market participants are worried that it may not be enough time for negotiations and that the UK may end up with a no-deal Brexit which could be detrimental for the economy.

Read our Best Trading Ideas for 2020.

FTSE Outlook

On the hourly time frame, we can see that the CFD chart of FTSE 100 has retraced some of its gains to the 23.6% Fib level (when you draw from yesterday’s low to its intraday swing high). It still has some room to move lower to around 7,580.0. This area coincides with the 61.8% Fib level as well as the rising trend line when you connect the lows of December 17, December 18, December 19, and December 23. However, if buyers dominate today’s trading, we may not see a pull back anymore. FTSE 100 could rally to new 5-month highs above 7,628.0.

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