UK100 – From strength to strength

Further to run?

The UK100 has been going from strength to strength in recent weeks, relatively undeterred by the wobble in broader stock markets over the last week or so as it eyes January 2020 highs above.

It’s already back in pre-pandemic territory and the momentum indicators on both the daily and 4-hour charts continue to look healthy. That may suggest resistance around 7,560 is looking a little vulnerable, with the next big test above coming around 7,700.

Ultimately, the ability to achieve these levels will depend on risk appetite remaining strong in the markets which, as mentioned, hasn’t really been the case recently.

Higher inflation and interest rates pose a risk to the global economy and the markets, while recent strength in the pound could begin to weigh given the historic negative correlation between the two.

But for now, the trend looks strong. Any sign of divergence on approach to 7,700 – should we get that far – will be interesting given how big a level of resistance it is and could signal a corrective move.

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