FTSE 100 futures nears key resistance level despite Brexit concerns

• FTSE 100 rally continues this week despite Covid-19 and Brexit concerns
• Blue-chip index continues to drive higher, with key resistance up ahead

The FTSE 100 has rallied 6% this week despite rising Covid-19 cases leading to the UK government imposing a second national lockdown and investors growing increasingly concerned about the economic impact of Brexit.

After yet another positive performance, the blue-chip index has recorded its best weekly gain since early June, spurred on by the Bank of England’s decision to step up stimulus measures in a bid to support the UK economy weather the impact of Covid-19 and another lockdown.

The FTSE 100 is trading at 5910 points at the time of publication, with the blue-chip index down 22% year-to-date.

FTSE 100: risers and fallers

Mining companies like Glencore, Rio Tinto and Anglo American, led the move higher for the blue-chip index due to a potential bull market in commodities coming down the pipe as a result of further economic stimulus by central banks and supply shortages.

‘Glencore has delivered a solid third quarter operating performance, including the continued successful ramp-up of Katanga, which remains on track to achieve design capacity by year end,’ Glencore CEO Ivan Glasenberg said. ‘We maintain our 2020 full year production guidance, except coal, which was adjusted for the extended strike at Cerrejon.’

‘We will provide a detailed business update, including progress on climate change initiatives at our investor update on 4 December,’ he added.

At the other end of the market, Rolls-Royce Holdings continues to see its share price come under further pressure, falling 6.3% on Friday and down 70% year-to-date. The British engineering company’s latest shares tumble came as its massive job-cutting programme begun to accelerate.

Rolls-Royce plans to reduce its headcount by almost 1400 in its civil aerospace division, with the unit hit hard by the coronavirus pandemic which has created complete chaos for the travel and aviation industry.

FTSE 100: technical analysis

The FTSE 100 is on the rise once again this morning, with the index having seen an impressive recovery over the course of the week thus far, according Josh Mahony, senior market analyst at IG.

‘That rise has taken us back into the 76.4% Fibonacci resistance level, bringing the wider bearish trend into question,’ he said. ‘Ultimately that trend does still hold until we see a rise through the 6041 swing-high.’

‘As such, the forthcoming period will be very telling, with a reversal from Fibonacci resistance or rally through 6041 paving the way for the next major move,’ Mahony added.

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