Charts of the Week: UK stocks extend losses as Britain exits the EU

Market Analysis /
Milan Cutkovic / 03 Feb 2020

GER30 is testing a key area of support between 12.880 and 12.935 points and a clear break below could signal an extension of the decline towards the 200 DMA (currently near 12.520 points). Sentiment remains negative, and the re-opening of Chinese stock markets may increase the pressure on the major indices. To the topside, traders will be keeping an eye on the psychological level of 13.000 points for resistance, followed by 13.180.


UK100 extended losses on Friday, along with the other European and US indices. The index closed the day below the 200 DMA and traders are now looking at 7130 as the next major level of support. The Daily RSI is not yet signalling oversold conditions, hinting that there might be scope for further losses. The UK has now officially left the European Union, and this has cleared some of the uncertainty. Nevertheless, negotiating a trade deal with the EU will not be an easy task and the risks remain high.


There might be potential for an extension of short squeeze in GBPUSD following the Bank of England´s decision to keep rates unchanged. The currency pair managed to bounce off the trendline support from the November low, and is approaching resistance at 1.3285. Should GBP bulls be able to clear this obstacle, a test of the December high at 1.3510 could follow soon.


The on-going risk aversion has put AUDJPY under increased pressure. The currency pair fell below another key area of support last week (73.20-50) and a test of the 71.70 level seems increasingly likely. The Daily RSI is signalling slightly oversold conditions, but there no signs of a potential recovery yet, and sentiment remains bearish.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

More on this topic

See More News

Open your account. Trade within minutes.

Start your trading journey with a trusted, regulated, multi-award winning broker.

Open Account Try Free Demo