FTSE 100 Approaches Critical Support
- The FTSE 100 remains bearish but price is now nearing a major support level, namely the April low of 6060.
- The very short-term trend is bearish below yesterday’s high of 6283.
- Markit/CIPS UK Construction PMI for April is on deck today and will be followed by key reports from the U.S., such as ADP Employment Change and the ISM Non-Manufacturing Index.
At the time of writing, the FTSE 100 (CFD: UK100) maintained its bearish bias which has been controlling price since April 20 when it reached a high of 6432.
The last short-term high of importance is yesterday’s high of 6283 and the trend is short-term bearish below this high given that it’s the most recent swing high in the downtrend since April 20.
According to classical technical analysis and for the bearish bias to abate, the sequence of lower swing highs and lower lows would need to end.
Short-term support levels are yesterday’s low of 6158, followed by the April 7 low of 6108 and the April monthly low of 6060.
We note that when price is nearing a major support level such as the April low of 6060, price tends to turn choppy. Between late February and early April, the 6060 level supported the FTSE 100. Below the 6060 level, the March 10 low of 6006 is the next resistance point and is followed by the February 24 low of 5841.
Resistance levels are yesterday’s high of 6283, the April 27 high of 6344 and the April high of 6432.
One of the macroeconomic reports, which may affect the FTSE 100 this morning is the Markit/CIPS UK Construction PMI for April, and as per a Bloomberg survey, the index is expected to decline to 54.0 from 54.2.
This afternoon key U.S. data reports are on deck: the ADP Employment Change and April’s ISM Non-Manufacturing Composite. Please read today’s market update by Ilya Spivak, Currency Strategist, for more on today’s U.S. economic reports.
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