Bitcoin finally breaks above key technical level and the FTSE 100 takes advantage of weaker pound, writes Fawad Razaqzada.

The pressure was building for Bitcoin to break above the technically-important $4,200 level over the past several weeks and today it finally gave way. My colleague Matt Weller had already written about this potential breakout. The breakout gave rise to further follow-up technical buying above this level this morning as a cluster of buy stop orders were triggered from breakout traders and some short sellers were forced to close out their bets. It will be interesting to see if the buyers will now be able to hold their nerve and defend this former resistance level.

bitcoin daily chart
Source: TradingView an FOREX.com.

The next potential trouble area comes in around $5,200, a level which was support in the past. We will be monitoring BTC/USD prices for further developments over the coming days to figure out whether this was indeed a genuine breakout or another false hope for crypto bulls, who have witnessed many such price spikes after the bubble deflated violently at the back end of 2017 only for the selling to quickly resume again. 

FTSE marches on despite Brexit stalemate

So, another round of indicative parliamentary votes on alternatives to Theresa May’s Brexit deal came to pass last night and once again all the options were rejected. A motion for a customs union with the EU was rejected by just three votes. The stalemate has clearly frustrated people on both sides. Tory Member of Parliament Nick Boles resigned the whip in frustration, while EU’s chief Brexit negotiator, Michel Barnier, blasted UK’s Parliament by suggesting that there are “only majorities against things” in the Commons and “that's not how we're going to manage an orderly withdrawal of the UK."

He added that a no-deal exit is now more likely but it can still be avoided. A general election may be needed if the stalemate continues in order to avoid a hard Brexit. That would probably mean a much longer extension to Brexit, which could further increase uncertainty and hurt consumer and business sentiment.

However, despite the uncertainty, the FTSE 100 is still up roughly 9% year-to-date, thanks to a weak pound and outlook for global interest rates to remain low for longer. The FTSE is showing a similar performance to the mainland European indices, so Brexit uncertainty is not just holding back UK stocks, but Europe as a whole. Indeed, because of Brexit and anemic growth, European markets are underperforming their U.S. peers. Nonetheless, the path of least resistance continues to be to the upside for the FTSE 100 and other EU indices and will remain that way until they create bearish reversal patterns or break a prior low. The FTSE’s technical outlook would turn bearish should it break its most recent low at around 7150, for then it will also have broken below its bullish trend line.

uk 100
Source: TradingView and FOREX.com.