FTSE 100: Trapped Between Major Support and Resistance?
- Yesterday, price slipped below last week’s low, but traders did not take notice. Has focus shifted to the big levels governing price action?
- The November 11, 2015 high of 6461 is capping price, while price is supported by the April 5 low of 6060.
The FTSE was up by 0.47% and led higher by Energy shares at the time of writing.
Yesterday, the FTSE 100 briefly slipped below last week’s low of 6260 but it was not enough to trigger further selling, with bullish traders instead taking control over price this morning.
Looking beyond the near-term price action, we note that the FTSE 100 maintains some of its bullish momentum started by mid-February. The critical level for the bullish trend in place since then is the April 5 low of 6060, as it is a higher swing low than the preceding swing low of February 24, namely 5845.
While the trend is bullish, strong resistance has not made it easy for price to continue the rally. Last week price reversed at 6432 as it approached the November 11 high of 6461. The FTSE 100 spent two months last year trying to breach the 6461 level, which shows how important this high is. Also highlighting the importance of the 6461 level is that the next major high beyond 6461 is the August 2015 high of 6760.
Price is supported by the April 5 low of 6060, but the 6150 level is also important as the FTSE 100 spent most of March trading around this level, making it potential support. The FTSE 100 could therefore be trapped between strong support and resistance.
The next support level beyond the April 5 low of 6060 is the February 25 low of 5845.
There are no U.K. or Eurozone market moving events on deck today. In the U.S. session, Durable Goods Orders figures, as well as April's Consumer Confidence and Markit PMI reports, are on tap, read more about them here.
FTSE 100 | CFD: UK100
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.