FTSE hits 17-month high, sterling at 31-year low

UK’s benchmark stock index, FTSE100 has hit the highest point in almost one and half years, while the sterling has dropped to 31 year low. We have been expecting the move in sterling especially after an array of better economic releases failed to push the currency above 1.345 resistance area against the dollar and broke below 1.3 area. In the short run, our call to sell pound targeting 1.2 against the dollar remains active and we stand by the call. The decline in the pound has been triggered by the return of the focus towards the Brexit process as Prime Minister May outlined her vision of exit in the Tory conference.

In July, we gave out a call to long the FTSE100 at 6550 targeting 7100 first, and then 7500 and 8100, while shorting the pound and we still stand by the call. The first target has been reached, however, it has taken a much longer time than originally anticipated.

You can check out the July call here, http://www.econotimes.com/FxWirePro-long-term-outlook-Go-long-the-FTSE100-short-the-sterling-233457