FTSE 100 Outlook: Resistance Eyed as Upside Persists
FTSE 100 Price Analysis & News
- FOMO Flows Support Global Equities Further
- FTSE 100 Gains Potentially Capped at 6000
- EU-UK Trade Talk Outcome Key to Direction
Today has been somewhat of a subdued session with equity markets trading with modest gains despite the rising uncertainty over the macro backdrop. Risks of a second wave of coronavirus cases remain as the economies look to re-open. Alongside this, tensions between the US and China continue to linger in the background. That said, equity markets have held up relatively well as upside momentum persists.
FTSE 100 Technical Levels
The FTSE 100 has continued to trade within a relatively tight range as last week's break above the 38.2% Fibonacci retracement set the index on course for a push towards the 6000 level. As such, the FTSE 100 eyes near term resistance at 6000-15, which may cap further upside. Failure to break above would place the focus back on 5955 in the short term before a move to the psychological 5900 area.
However, with that said, the lack of fresh negative catalysts may induce FOMO flows to continue supporting equities higher and thus would place greater focus on 6130, which also coincides with the 50% Fibonacci retracement.
On the UK specific front, we are keenly awaiting the outcome of the EU-UK trade talks. As a reminder, the prior round of talks saw little in the way of progress, therefore, another round of little progress could see Brexit risks heightened and thus place pressure on UK assets.
FTSE 100 Price Chart: 1-Hourt Time Frame
FTSE 100 Price Chart: Daily Time Frame
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.