FTSE 100 Technical Highlights:
- FTSE may soon snap topping sequence if rally continues
- Channel off October low offers up a guide in the near-term
- Trading above July trend-line, 7439 resistance next
For our analysts intermediate-term fundamental and technical view on the FTSE and other major indices, check out the Q4 Global Equity Markets Forecast.
FTSE may soon snap topping sequence if rally continues
The FTSE 100 isn’t particularly strong these days, especially when compared to other major global markets. The US markets are ripping to record territory, while major indices in Europe, DAX & CAC, are nearing record levels and at multi-year highs, respectively.
Despite the lagging nature of the FTSE, it could still snap a topping sequence that was once strong in form and held promise for those looking for a swoon, and with it ultimately an uptick in volatility. The head-and-shoulders topping formation developing since April is still intact, but quickly dissolving.
If the FTSE can rally above the 7439 level then the pattern will effectively be taken off the table, and the high from July at 7727 can start to come into focus. However, that level will as per usual be considered a level of resistance until broken, which doesn’t leave much room before a possible road-block could stymy upward progress.
A guide worth keeping tabs on, is the developing channel off the October low. It has a fairly clean structure and as long as the lower parallel stays in place, so does a neutral to upward trading bias. Break below the lower parallel and the outlook quickly changes, at least in the near-term.
For now, risk/reward isn’t particularly favorable for either side of the tape…
Check out this guide for 4 ideas on how to Build Confidence in Trading.
FTSE Daily Chart (H&S top could soon be broken, keep an eye on channel
Tools for Forex & CFD Traders
Whether you are a beginning or experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX