The greenback weakened for a third day and fell against the British pound after Federal Reserve’s minutes showed concerns that the low inflation readings might not be completely transitory. As the sterling edged up versus the dollar, the U.K. blue chip index ended slightly lower on Wednesday weakened by paper and packaging company Mondi that dropped 6.6% amid disappointing results and sub-prime lender Provident Financial which fell after a downgrade from Barclays. According to Reuters, investors expect the leading share index to stall into the year-end, with economic and political worries and a stronger pound preventing further gains. The market should continue to show signs of volatility as the fifth round of Brexit talks is coming to an end on Thursday. The prospect of the Bank of England raising interest rates is also adding to buyers’ caution.
The British FTSE found enough support around the 7,480s and is still trading above the 25-EMA (gray line). The 7,500 is a psychologically significant zone for traders and if the index will manage to close above that level, it will eventually continue its rally toward the 7,600s on the longer term. The Relative Strength index (RSI) shows a print of 57 which suggests further upside potential. On the downside, if the index dropped down below the 7,475 handle, the market could have an extended pullback looking for support at the 7,440s.
The best performers on the index are Burberry Group PLC which rose 3.09% to trade at 1904. easyJet PLC increased 1.16% to end at 1304 and Fresnillo PLC was up 1.04% to reach 1459.
The worst performers are HSBC Holdings PLC which fell 1.24% to trade at 89.53. Tesco PLC declined 0.75% to end at 185.80 and Berkeley Group Holdings PLC declined by 0.65% ending at 3810.