What’s Happening? It looks like the rally in the FTSE that started after the Brexit referendum may be over for now with a breakdown in the index confirmed by a breakdown in RSI momentum. With sentiment toward stocks in general souring and GBP rebounding with the UK Government set to trigger Article 50 this week, we could see significant action in UK stocks this week. Technicals: The UK 100 chart above shows that after the US election, UK stocks rallied along with their counterparts in other countries. A new high, earlier this month, however, was not confirmed by the RSI, a negative divergence which suggested upward momentum was slowing and a top forming. The pair had already started to fall back but this week, a break of a trend support line near 7,300 has signalled the end of an uptrend and the start of a new downtrend. At the same time, the RSI indicating breaking under 50 has confirmed a downturn in momentum. This breakdown also ends an uptrend that has been in place since the Brexit referendum. Next potential support tests for the UK 100 appear near 7,260 a 23% retracement of the post-US election uptrend then 7,200 and 7,150 a 38% retracement. Fundamentals Three big factors could influence trading in UK stocks this week. The FTSE staged a major rally after the Brexit vote due to the collapse in the Pound. The top UK index includes a number of global multinationals that rallied in GBP terms as Sterling plunged. Heading toward the planned triggering of Article 50 on Wednesday and the expected EU initial response by Friday, Sterling is bouncing back which could create a big headwind for the FTSE. The FTSE staged a second rally after the US election along with other major stock markets around the world as traders anticipated that President Trump would be able to implement business friendly reforms quickly and easily boosting corporate profits. The failure of health care reform, however, has cast a cloud over markets, raising questions about how much reform the new President will be able to actually achieve and when? Financials in particular had benefitted from the Trump trade and could be vulnerable to a global sector correction. The FTSE has a relatively high weighting in commodity producers which could spark mixed trading action. So far this week, gold is rallying while Brent crude and copper are selling off. These moves could spark swings in gold miners relative to energy and base metal companies.