FTSE 100 ended higher by 0.20% or 13.91 points at 7,034.13 as pound slides

• London stocks kept up the corrective momentum on Monday as sterling continues to bleed out, this time on poor construction sector data ahead of the BoE this week. 

The FTSE 100 ended higher by 0.20% or 13.91 points at 7,034.13 while cable dropped 0.2% against the US dollar to 1.30562. With respect of data, the British construction slowed to a 10-month low in January, mainly down to holds up in the projects due to Brexit uncertainties. IHS Markit/CIPS's UK Construction PMI for January fell in at 50.6, lower than the December's figure of 52.8 and was a disappointment with respect to the consensus of 52.6. 

BoE outlook

Analysts at Rabobank offered a snapshot preview to this week's BoE:

• "We don’t expect the Bank of England to alter its policy settings at the February meeting
• The tight labour market indicates that a rate hike would have been on the cards for today’s meeting, but this is being more than overshadowed by Brexit uncertainties
• The meeting in May offers the best hope of a hike to 1.00%. This, however, assumes that the UK will be leaving the EU with a deal in place
• If there is no sign of any material progress on Brexit in the next few weeks, leaving the MPC without the clarity it so much needs, we may want to re-visit our forecast."

As for corporate news, Royal Dutch Shell was jumping out in the FTSE 100 index. We have seen brent crude at two-month highs, just below $64 a barrel, on the back of OPEC-led produciton cuts and the newly imposed U.S. sanctions against Venezuela's petroleum industry. However, the top three performers were Rentokil Initial (RTO) 349.50p 2.67%, Sage Group (SGE) 642.80p 2.55% and then TUI AG Reg Shs (DI) (TUI) 1,190.00p 2.45%. The losers were Smurfit Kappa Group (SKG) 2,160.00p -2.35%, Imperial Brands (IMB) 2,505.00p -2.09% and NMC Health (NMC) 2,536.00p -1.63%.

FTSE levels

The index broke the 7000 on the third attempt. However, the price is holding below the 100-D SMA and needs to cross over the line at the 38.2% fibo retracement of the May 2018 decline located at 7040 with conviction; A break of which opens a run to the late Oct high and 50% Fibo confluence of the same decline around the 7200 psychological level. At this juncture, the price is heading north in the middle of the regression channel without a deviation one way or the other, albeit max out the ATR on the upside. If the index fails to close above the 38.2% fibo, profit taking opens the risk of the same value of ATR to the downside, targetting S1 at 6977.