Quote from Nick on 17th January 2019, 11:38 am

17th January 2019

Theresa May survived an attempt to oust her government and immediately opened talks with rival political parties in an attempt to break the Brexit deadlock, as time runs out to reach a deal. The prime minister fought off the threat of a national election and won the right to continue running the country when the House of Commons voted 325 to 306 against a motion of “no confidence” in her administration. The pound edged higher. May invited other party leaders, who back keeping much closer ties to the European Union, for talks tonight to discuss how to forge a compromise Brexit plan that Parliament can support.

Major world stock indexes rose on Wednesday, with the S&P 500 supported by sharply higher U.S. bank shares after strong earnings, while the pound was up after Theresa May's government won a confidence vote in parliament.
That should allow her to attempt to create a consensus among lawmakers on an agreement on Britain's departure from the European Union. The confidence vote followed the parliamentary defeat of May's Brexit deal late Tuesday.

Expectations of a softer Brexit - perhaps incorporating the Labour Party's idea of membership of a permanent customs union - gave some support to the pound.

U.S. stocks pared gains late in the day on a report by the Wall Street Journal that said federal prosecutors are investigating Huawei Technologies for allegedly stealing trade secrets. Banks buoyed major indexes Wednesday as Goldman Sachs and Bank of America surged following quarterly reports. The 10-year Treasury yield rose to around 2.72 percent, while the dollar gained against almost all major currencies. In Europe, Deutsche Bank advanced after regulators were said to favor a merger with a European lender. Oil closed higher for the second straight day as Russia and Saudi Arabia signaled they’re on track with production cuts designed to avoid a global supply glut.

The People’s Bank of China has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, with the latest move a record one-day injection of cash into the market. The central bank pumped in a net 560 billion yuan ($83 billion) into the financial system on Wednesday, the biggest open market operation on record. While that action was mostly aimed at addressing a funding shortage ahead of the Chinese New Year, it also speaks to a policy priority for the PBOC -- providing cheaper funding to banks to allow them to lend to companies at lower rates.

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FTSE 100 Trading Signals, Forecast and Prediction

We have dropped down overnight to test the 25ema on the daily chart at 6832 and are also near the daily support level at 6825 so may well see an early climb from this support area this morning. If we do then the bulls will be more than likely targeting the 6867 daily pivot area and also yesterday's closing price of 6862. We also have the 200ema on the 30min chart at 6874 as resistance now. The bulls will basically need to break above this zone now to retest the 6950 and higher levels.

We still have daily resistance at the 7002 and 7006 levels, and if the bulls were able to push up to 6900 that would be the next logical target after that. It will be interesting to see of the 6825 support area holds today. Below this then we are looking at 6788 and S3 for today at 6750.

[caption id="attachment_13674" align="aligncenter" width="821"] 6825 support today with possible climb to 6860+ | May survives no-confidence | Treading analysis | Learn to trade[/caption]

Interesting article in Bloomberg today regarding the FTSE 100 and that stock valuations are just below the historical average so may well see some bargain hunters starting to appear. While Brexit has serious implications on the domestic economy, the impact to earnings of companies listed there is much, much smaller. Hence you also have that negative correlation to sterling. Bad Brexit news, pound gets pounded, earnings get an additional boost. Good news on Brexit, sentiment improves, market goes up. This is obviously oversimplifying things, but some of these basic truths tend to get drowned out by the crazy amount of political noise.

With the FTSE 100 dropping from the 6910 area yesterday the 2 hour has gone bearish and is showing resistance at 6866 in the near term, and yet another level in that resistance zone. Ergo the bulls might have a job today to break higher than this, but with positive RSI divergence on the 30min chart to start today we may well see that 6825 level hold initially. The dust may well settle on the political turmoil for the moment as well as the cross party Brexit plans get underway. Interesting times for trading the UK still!

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