15th November 2018
Today will be all about this Brexit deal, so going to be another tricky one to call. Will it be the end of May with a no-confidence vote, paving the way for Boris to get the keys to No 10? Will parliament be on board now cabinet approval has happened? What will the public make of it? What will the EU say? So many “known unknowns”!
After more than five hours of being locked away with her Cabinet, Prime Minister Theresa May emerged from her office and in less than five minutes announced she’d wrested their backing for her Brexit deal. More battles lie ahead: “The choice before us is clear: This deal,” she said “or leave with no deal, or no Brexit at all.” The EU’s statement was much longer than May’s, and also seemed more upbeat. Unlike the prime minister’s, it ended with questions from reporters. The EU’s chief Brexit negotiator, Michel Barnier, says there’s a lot of work still to do and the path may be difficult. In addition, divisions in the Labour Party will play a key role in deciding whether May gets her deal.
Downing Street is trying whip up support from industry heavyweights willing to publicly back the proposed Brexit deal.
However, the move is understood to be meeting resistance from business chiefs as they are reluctant to back the draft withdrawal treaty without knowing its details. City heavyweights said they need to understand how the UK’s trading relationship with Europe will be affected after Britain leaves, and have long demanded clarity to help them work out how to prepare their businesses for it. Referring to the withdrawal plan, one senior executive at a FTSE 100 company said: “This is not the beginning of the end, but it might be the end of the beginning. The problem is we just don’t have any details.”
Last week Theresa May announced the creation of five councils to advise her on the post-Brexit business environment. It is understood that key members of these councils – which represent five key sectors of the UK economy – were put on standby for a 5.30pm briefing. Bosses at major companies and leading business associations have also been warned to be ready for a conference call led by Chancellor Philip Hammond on how the withdrawal treaty will work and its likely effects. One source said that the deal seems to have delivered much of what business has been seeking – chiefly trade with the EU which is as frictionless as possible – but without seeing the detail, companies are reluctant to swing behind it. “If it is 500 pages long then it’s bound to throw up some unexpected hurdles,” said a person close to the situation. “It would be a mistake to back it without having considered it.”
FTSE 100 Trading Signals, Forecast and Prediction
Well this will be tricky to call. I am feeling, again, cautiously bullish but it will all depend on the reaction to this Brexit plan by the markets/big companies. Will it get Parliamentary approval? The 7000 level has been defended again anyway, even though we tested 6980, so we may well see a bit of a rise today towards 7115 (yesterdays high) and R2 at 7168. The early action as I am writing this looks positive, and we have held up well overnight on the futures prices. As such, the 30min chart is looking bullish and showing support at the 7020 level, while the 10 min chart is showing support at 7012 and 7004. I think buying dips to around this area is therefore worth a go today.
It will be a bit of a shame if after all the faffing around with the Brexit deal that it causes markets to tanks.
On the support side of things, if the 7000 level breaks then there is a key fib at 6975 and then S1 at 6950. I don’t think we will get that low today though as expect that 7000 level to hold. After all, the bulls really put the effort into holding above it yesterday.
Oil finally broke its losing streak and the ASX200 (Australia) had a V shaped day Thursday so I am thinking that we will see some bullishness today off the back of that. If the bulls were really able to push on then a break of 7170 does keep the possibility of a rise towards 7250 alive. We shall see, so be prepared for a bullish 24 hours to end the week. Good luck traders!
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