FTSE 100 Remains Technically Sound
- FTSE 100 intermediate-term channel keeps it headed in ‘right’ direction
- Top-side levels could soon keep the advance in check
- Key Support and resistance levels outlined
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The FTSE 100 continues to push its way higher, marked by higher highs and higher lows since the January pullback. It hasn’t been a rip-roaring rally, rather orderly and thus far provided no reasoning for taking the other side of it.
In the intermediate-term, the channel since early Feb will continue to act as our guide for the foreseeable future. As long as the market stays above the lower parallel we’ll stay in the bull-camp. But even if the footsie were to drop below the lower parallel, support will quickly arrive at trend-line(s) off the late June (‘Brexit’) low.
The FTSE is trading above the 2013 top-side trend-line (passes over the 2015 high, Jan high, through the recent swing high); we’ll look to it as potential support, but given the long-term nature of it we will give it some leeway in using it as a key short-term level.
Another top-side line to watch extends off the Jan peak; we’ll keep an eye on this one and how the market wants to treat it as well.
Looking a little higher, there is confluence between the top of the intermediate-term channel and another top-side trend-line running higher off the October 2015 high. This might be a spot to look for the current advance to stall and turn lower. The last line of resistance arrives beyond the confluence at a trend-line extending upward off the high created back in August.
For now, there is good technical structure still to the upside, but the market has some levels to peel through if it is to get itself into the ‘all-clear’. As mentioned in the weekly forecast, keep an eye on the DAX – it has a technical formation which is close to triggering, and the move could be big. It’s unlikely the DAX makes a sizable move and it won’t be felt elsewhere.
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.