Technical Analysis

FTSE Chart Evaluation – Resistance Could Proceed to Preserve a Lid on the Market

FTSE Technical Highlights:

FTSE rally stopped in its tracks round 7200

Right this moment’s rally could solely be one other check earlier than decrease

Get your forecasts at present for the FTSE and Pound proper right here on the DailyFX Buying and selling Guides web page.

FTSE rally stopped in its tracks round 7200

The FTSE’s rally since late final month took it as much as the world surrounding 7200, a spot penciled in as probably being problematic given its significance late final yr. The flip down to finish final week was the primary signal of this truly being the case.

Right this moment’s rally is bringing the FTSE close to one other check of resistance, however will it break on by way of? Final week we noticed Euro-zone equities weaken materially, Japan is at multi-week lows with solely a few days of promoting, and the U.S. could possibly be simply getting began on turning decrease.

With the worldwide image in thoughts, the FTSE, which was a draw back chief through the back-half of final yr, seems to have its work reduce out for it if it will proceed to work its approach increased. For now, I’m going to offer the advantage of the doubt to resistance (as all the time, respect till damaged).

If the FTSE is to commerce materially increased, a bit back-and-forth would do it some good to construct up some energy earlier than making one other try to rally. Assist clocks in round 7k, close to a pair of highs from final month. The zone simply above, if damaged, will shortly deliver the 200-day into play, one other sizable headwind for the index.

For now, the sensation is that the prudent strategy might be to offer the market a bit time to determine itself out earlier than operating with a bias in both path. It’s round sturdy resistance (maintaining longs at bay), however on the identical time the overall near-term development construction remains to be supportive (maintaining shorts at bay).

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FTSE Day by day Chart (Resistance to be problematic)

FTSE daily chart, resistance to be problematic

You possibly can be a part of me each Wednesday at 10 GMT for stay evaluation on fairness indices and commodities, and for the remaining roster of stay occasions, take a look at the webinar calendar.

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—Written by Paul Robinson, Market Analyst

You possibly can comply with Paul on Twitter at @PaulRobinsonFX

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