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FTSE and GBP USD Alignment

FTSE100 and GBP USD alignment

Are we seeing a major alignment of the FTSE and the GBP USD (and to a lesser extent GBP EUR) which will see a sharp fall in the FTSE 100 and a strengthening of Sterling?

Our analysis suggests we are.

As our clients and followers know we have been bearish on the FTSE since July and the current downward trend has proved to be intact whilst other indices have been rallying. We believe the next week or so will see this scenario continue to play out – with possible opportunities to add to short positions.

FTSE 100 daily chart at October 21st 2020

We have been similarly bullish on Cable and we expect long term weakness in the USD to develop further. There may be a little “breather” in the next few days – which aligns with our FTSE projections and could give lower risk long entry points.

GBP USD October 21st 2020

So where does that leave GBP EUR. Many analysts are very bearish on this relationship but we believe the long term weakness of the Dollar and the underlying weakness of the European economies will outweigh major moves to the downside – just look at the rejection of yesterday’s fall!

GBP EUR chart October 21st 2020

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Please note our posts do not constitute investment advice.