These are interesting times. The UK 100 index is now 3.5% above its pre Brexit close. Part of the reason is that the Pound is down 10.5% since Brexit. Many UK companies will benefit from this. However, last night the Pound had a sharp rally in what could be the beginning of a correction. It’s gone on with it in the Asian time zone today.
An ongoing correction in the Pound could make this an interesting situation for the UK 100. The chart has reached a harmonic AB=CD level and is looking a little tentative there at the moment.
With the Bank of England meeting due tomorrow, it may pay to wait for confirmation that this level is being rejected. The AB=CD level on the FTSE 100 index is actually about 10 points higher than current levels. So I will also be alert to the possibility that price could push a little higher before peaking.
Risk management and stop losses are as usual essential with plenty of scope for volatility surrounding the BOE meeting.