FTSE: Bearish engulfing leaves eyes back on 7060/70


  • The strength in the pound once again played havoc in the UK shares market with the FTSE 100 ending 61.23 points lower to 7,167.39, down 0.85%, extending the weeks corrective losses with targets set on a break below the 7100 psychological level.
  • In late London trade, GBP/USD traded as high as 1.3096 before giving way back to a NY session low of 1.3025. 

The UK's Chancellor was optimistic over a Brexit deal and was reported by the BBC saying that the European Union now promising "guarantees" that the Irish backstop would not be permanent. The leader of the House of Commons, Andrea Leadsom, said the UK government was still planning to go ahead with a vote in Parliament on a new Brexit deal.

Meanwhile, on the trade front, Bloomberg had reported the prior day that Washington and Beijing were working on various MoUs covering areas ranging from agriculture or technology transfers and intellectual property to non-tariff barriers - giving risk a boost and broadly supporting FX.

"The closer to the 29 March deadline the UK gets without a deal, the greater the prospect of an accidental no-deal. But we think that PM May will seek to avoid this by
requesting an extension of Article 50 if she has not secured a new deal by endMarch. This would reset the deadlines identified above," analysts at Standard Chartered explained...

"We stress that if Parliament takes over the political process, an article 50 extension will become more likely. MPs are lining up to attach amendments to whatever motion the PM next brings before Parliament (currently 27 February), and if these are passed, they could derail the PM’s plan to take the decision down to the wire."

Best and worst performers

On the corporate front, the top performers were Relx plc (REL) 1,765.50p +4.78%, British Land Company (BLND) 580.80p +1.22% and Land Securities Group (LAND) 879.40p +1.17%.  The worst performers started with Centrica (CNA) 121.15p -11.70%, followed by BAE Systems (BA.) 464.80p -7.85% and Imperial Brands (IMB) 2,601.00p -4.15%.

FTSE levels

The index has fallen below the 7160/70 support line and has printed a fresh fractal low on the hourly charts and a seven-session low on the daily sticks. The break and close below the 6th Feb fractal highs should be a warning to the bulls as should the bearish engulfing daily candle. On a break of the 23.6% Fibo of the lade dec risk to recent swing highs, bears can now aim for a firmer 7060/70 support area (made up of 38.2% Fibo of May 2018 highs to Dec 2018 lows and Feb/Mar 2018 and Feb 8th 2019 lows). On the upside, bulls need to get through the 200-D SMA at the round 7300 level, a moving average that was last tested and breached momentarily back in Sep 2018.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD recaptures 1.08 as coronavirus fears weigh on market mood

EUR/USD has recaptured 1.08 as US bond yields retreat in reaction to growing fears about the coronavirus outbreak economic impact. Earlier, the pair plunged amid weak German data.

EUR/USD News

GBP/USD bounces above 1.30 as markets shrug off wage figures

GBP/USD is trading above 1.30 as investors ignore weak UK wage figures and Brexit concerns once again. Coronavirus headlines are eyed.

GBP/USD News

Altcoins push hard not waiting for a Bitcoin reaction

The Altcoin market has only needed one business day to see prices rise sharply again. Bitcoin, still, has adopted the anchor function and for the moment is giving up the battle for the $10000.

Read more

Gold firmer, near $1,600/oz on coronavirus fears

Renewed fears around the Chinese coronavirus (COVID-19) have been supporting the demand for the safe haven metal in past hours, taking the ounce troy to levels just shy of the key $1,600 mark.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures