What’s inside:
- The FTSE 100 trades well below the 6955/18 resistance zone
- Market to remain heavy, minor and more significant levels outlined
- High Court Brexit ruling, BoE later on, no changes expected; focus will be on inflation report and statement
The other day we were looking at the bearish sequence of lower highs and inability for the FTSE 100 to garner any buying interest as it sat on important support in the vicinity of 6955/18. From Tuesday’s post:“A daily close below 6918 would put buyers on their heels while giving sellers reason to press more aggressively.” Tuesday’s poor close just under the bottom-side of support led to yesterday’s 1%+ sell-off, with global stock markets weighed down across the board.
The first level of noted support is close at hand by way of the lower parallel (~6835) married to the trend-line running off the 10/11 high. It’s considered a minor level of support, though, given the few inflection points on both the top and bottom-side trend-lines and overall downward trend. Nevertheless, we will take interest in seeing how the market responds there today. The first level of price support doesn’t arrive until the 9/27 low at 6769. Below there, with aggressive selling, we will look to the 9/15 swing low at 6655.
Given the FTSE is trading below the important 6955/18 zone which previously kept it afloat, it is anticipated in the near-term that sellers will keep a lid on the market at those levels should it rise so far.
FTSE 100: Daily
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Heads up: Later this morning at 10:00 GMT the High Court is set to give their ruling on whether or not Theresa May has the right to bypass Parliament in triggering the UK’s exit from the EU. At 12:00, the BoE is expected to stay on hold with rates (0.25%) and the asset purchase target (£435b), placing the market’s attention on the quarterly inflation report and policy statement. Sign up for the BoE Rate Decision with Christopher Vecchio and check other upcoming live events.
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---Written by Paul Robinson, Market Analyst
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