FTSE 100 Tests Upper End of Recent Trading Range
- The FTSE 100 is testing the upper end of the 6054-6195 range. The bias will remain neutral as long as the 6054 to 6195 range caps price.
- Resistance levels above 6195 are the May 3 high of 6283, followed by the April 27 high of 6341. The only strong support level at the time of writing was the May 6 low of 6053.
- U.K. CPI is on deck this afternoon.
The FTSE 100 (CFD: UK100) was trading near the upper end of the 6054 to 6195 range as trading resumed on Tuesday and at the time of writing.
Gains in the Basic Materials Sector (+1.66%) and Technology Sector (+1.02%) helped to lift the index over the last 24 hours to the upper end of the above-mentioned range, while the Utilities Sector underperformed and traded lower by -0.84%. The upper end of the above mentioned range is the May 12 high, while the lower end is the May 6 low.
We note that this is the same way that price tested the lower end of the 6054-6195 range on Friday of last week; price is now testing the upper end of the range. On price being able to establish itself above the 6195 high the FTSE 100 would no longer be trading sideways, and instead a bullish bias may be taking over, as price would be creating a higher high above 6195. Nevertheless, as long as the May 12 high of 6195 is capping price, then the FTSE 100 will remain trading sideways.
Resistance levels above the May 12 high are the May 3 high of 6283, followed by the April 27 high of 6341. The only strong support level at the time of writing was the May 6 low of 6053 and below it the March 10 low of 6006.
FTSE 100 | CFD: UK100
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
A rise of 0.5% YoY in April, unchanged from 0.5% in March is projected for U.K. CPI as per a Bloomberg News Survey. This stands in stark contrast to the deflationary situation in October and November of last year when annual inflation growth was negative. The recent rise in inflation moves it closer to the Bank of England’s target of 2% but is still far away from triggering any action by the bank. FTSE 100 traders may therefore not pay too much attention to today’s reading.
--- 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.