FTSE 100: Levels & Lines to Watch, US Election Day At Last
- The FTSE 100 bounces strongly to start the week on US presidential election news
- Nothing look great on the charts at the moment, entering trades at this juncture holds lots of risk
- Support and resistance levels outlined
After taking a strong hit last week, the FTSE 100 started Monday off with a big rip on the back of the FBI clearing US presidential candidate Hillary Clinton of any criminal wrongdoing in handling of her email. Major U.S. indices surged over 2% each. Today is the big day in the U.S. – election day. This makes any market maneuvers at this juncture unnecessary with risk/reward skewed unfavorably until we at least see how the market first reacts to the outcome – something we won’t know until early morning GMT hours Wednesday.
On this end the market is viewed almost exclusively through a technical lens, but in terms of executing trades some events are large enough to warrant standing aside first, regardless of what the technical landscape looks like, at least until after we see how the market will react.
With that said, there isn’t any great takeaway from the charts at the moment. Yesterday’s rally came from an oversold state and is neither here nor there, overall.
The bounce began from near fairly significant support by way of the 9/15 low at 6655. We will keep a few levels and lines in mind as things unfold and take it from there. The market might find support on the recaptured 9/27 low at 6769. The more significant level of support comes in at the Friday low of 6676, then the 9/15 low at 6655. A drop below the important 9/15 swing low likely means global risk appetite has soured significantly, with minor support first clocking in at the 8/4 low of 6616. The FTSE doesn’t have any material support until an area in the 6400s which goes back to July 2015. This zone also coincides with the 200-day MA, currently at 6448.
Minor resistance comes in at the lower parallel off the 10/11 high (currently trading there), with significant resistance in the vicinity of 6955/6918. This area on a first test should prove to be formidable to overcome given its importance since August.
We’ll just wait it out until after the election and wait for markets to ‘normalize’ before drawing any concrete conclusions. Come join me tomorrow at 9 GMT for a webinar looking at market price action following the election results.
FTSE 100: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.