FTSE 100 Technical Update: Supported in Holiday Drift
- FTSE 100 lacking volatility in light trade, but still need to remain on our toes if trading
- Record high levels look likely to get tested at some point
- Good support below should the market take a minor hit
The FTSE 100, like other global markets, is lacking much volatility during the light holiday trading environment. The FTSE is trading ‘strong’ above the 11/10 spike high, so far not making any attempt to retest the 11/10 highs or the June trend-line. With a little more time, the 11/10 level at 6997 and the rising trend-line will cross paths with one another. So even with minor weakness the UK index is well supported on a dip into year end. At this time, it is likely an unforeseen event will be needed to set off a sizable shuffle in risk assets.
Looking ahead there is a resistance at 7067 formed by a pair of back-to-back days in October where the market rallied and reversed from the same level. Trade above those peaks will likely lead to a test of record highs, at the least. We have it penciled in as a zone from 7104 to 7130 (closing high in April 2015, intra-day high in October, respectively). How the market is able to handle those levels upon arrival, we’ll just have to wait and see. It might not happen until January (assuming it does) at the pace we are moving now.
It’s a slow-moving trading environment, and while there is seemingly no threat of a major bout of volatility, our experience has taught us to always expect the unexpected. This means keeping risk management as rigid as any other period of trading.
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.