European markets had a mixed opening on Wednesday after most benchmarks hit major support levels after yesterday’s downside moves. Market sentiment remains hesitant as most investors now seek further bullish catalysts before taking prices higher. Surprisingly, the FTSE-100 Index is one of today’s best performers with the index trading higher and evolving inside an encouraging technical configuration. The difficult negotiations between Boris Johnson and EU officials on the Brexit deal, and more specifically on fishing rights, had a significant negative impact on Sterling. However, this has also made the large companies of the FTSE-100 Index more competitive than ever on international markets and this has helped sustain investors ‘appetite.
From a technical point of view, the index is still trading inside a bearish flag pattern, challenging the 6,000pts level close to the upper band. However, the market hasn’t registered any new market low since its double rebound over 5,800pts while the Relative Strength Indicator has already broken-out of its bearish trendline as well as the key 50% level to tip the index into buy territory. Even if this is seen as a bullish situation, the price will have to clear the 6,080-6,120pts zone to unlock an extended bullish potential at first 6,170pts, then 6,300pts, then 6,420pts and ultimately 6,510pts. On the downside, the first available support is at 5,950pts on a short-term basis.
