FxWirePro: FTSE100/Sterling call review

On 15th September last year, in an article named, “FxWirePro long-term outlook: Go long the FTSE100, short the sterling”, available at http://www.econotimes.com/ , we called on our readers to long the FTSE100 at the then current rate of 6550(approx.). We gave out targets at 7100, 7500, and finally 8100. We also called on our readers to short the UK’s currency pound sterling at the then current rate of 1.346 (approx.) against the dollar and at rallies up to 1.4 against the dollar with a target of parity.

Just as we expected, the uncertainties surrounding Brexit has pushed down the sterling, while the FTSE100 benefited. FTSE100 is currently trading at 7315 and out long call in FTSE has returned about 11.7 percent. Our short call in pound has returned more than 900 pips. This call looks to be a successful one so far.

While we maintain our outlook and expect both of them to reach the stipulated target, we would like to recommend to our readers to reduce their exposure to this call by at least 30 percent but by no more than 50 percent. The reason behind in the possible volatility spikes as the Article 50 is about to get triggered tomorrow.

Key supports for FTSE100 lay around 7000 and around 6700. Key resistances for the pound lay around 1.277 and around 1.3 area.