Is the FTSE on Track for a New Record

The FTSE 100 is on track for a potential record high, having recovered from a weak day of trading on Friday. The recent weakness in the pound has helped the index, and the speculation about Theresa May’s future is raising questions which could cause more long term problems for the pound - which is good for the FTSE 100.

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shareprices.com - Tuesday, October 10, 2017

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The UK’s leading index is in a growth cycle at the moment, and should it break above 7,530 and stay there, then the next growth point is 7,625, with the potential to hit 7,675 later.

Analysts are predicting that the index should see support at 7,350, with resistance at just over 7,625. If we do see a period of weakness, then there is further support at 7,203 and secondary at 6,990 - however it is unlikely that this will occur as the upward trend is so strong.

The pound seems to be showing a lot of weakness, and this is always good news for the FTSE 100 as so many of the listed companies take their earnings in dollars. The FTSE 100 tends to make gains whenever the pound is showing weakness, and the recent uncertainty about Theresa May’s future, along with the lack of progress in the Brexit negotiations, will most likely continue to hamper the pound over the coming months.

Bank of England Governor Mark Carney has suggested that interest rates will increase if the economy continues on its current track, but the increases will be slow and measured to avoid negative reactions as the markets adjust to the new rates.

 

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