2019-10-17 - FTSE 100 Rises Modestly on the First Day of the Summit for Brexit
European Union leaders headed to Brussels on Thursday for a two-day summit. At the meeting, the authorities will discuss a possible agreement on Britain's exit from the EU.
UK Prime Minister Boris Johnson will seek to seal an agreement with the 27 EU leaders that will allow him to leave the EU on October 31.
Prime Minister Johnson met with the president of the European Commission Jean-Claude Juncker. A spokesman of the Commission, when asked about the meeting, said he still wants an agreement.
Johnson, meanwhile, is still struggling with the British Parliament to gain political support. These difficulties are intensified, especially by the agreements made on the border between Ireland and Northern Ireland.
Minister Johnson promised to withdraw Britain from the EU on October 31. This occurred despite the existence of a law that requires requesting an extension if Parliament does not approve Brexit.
Thursday, FTSE 100, the main British stock index, is moving cautiously. The FTSE 100 rises modestly 27.5 pts or 0.38% to 7,197.5 pts.
Technical Overview
FTSE 100 in its weekly chart illustrates a rally from the Christmas 2018 low at 6,535.25 pts. The Elliott wave structure could correspond to an expanding triangle.
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FTSE 100, in its daily timeframe, shows a triangular formation. If we observe the short-term bottom between the local lows at 7,018.55 and 7,003.25, we foresee a marginal upside. This upside probably doesn't reach its 2018's high of 7,903.50 pts.
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On the 4-hour chart, we detect a potential bullish 1-2-1-2 structure. The formation in progress could activate a short-term bullish sequence. However, the rally likely fails once the British index tests the late July high at 7,730.45 pts.
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If our hypothesis is correct, FTSE 100 could see short-term highs between the 7,450 pts and 7,710 pts. However, from the daily chart, we don't expect an extended move. The invalidation level for the upward scenario is at 7,003.25 pts.
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