FTSE 100 – Turnaround Adds Importance to Line of Resistance
- FTSE 100 turns lower after trying to trade above top-side trend-line
- April trend-line just below as support
- One side or the other to give-way soon
In one of last week’s pieces we were discussing the FTSE 100 and the lines of influence it’s trading between – big support below, minor resistance above. ‘Minor resistance’, though, is becoming increasingly ‘major’ as the market continues to fail around the top-side trend-line extending over from the January high across the March high and over price action since the middle of last month. Resistance does exist even at record highs.
Yesterday, the market tried to push on through, sporting solid gains at one point during the session, but eventually failed to put in a fairly sharp key reversal day. The failure made it the second one of force in the last couple of weeks. Despite treading in record territory there is a technical event which continues to keep an advance from maturing. Should the Wednesday reversal prove to be short-term bearish, there is a trend-line rising up from the low established in April which may help keep the market buoyed, and ultimately pinned up against the top-side trend-line. Given the intersection between the top-side trend-line and rising support something will have to give here soon.
A clean break and close above the top-side trend-line will take what has been a problematic line of resistance and turn it into a source of support, with no other visible levels of resistance ahead. While follow-through on yesterday’s rejection-day leading to a break of rising trend support could weaken the FTSE back towards a major area of support near 7400. The long-term 2013 trend-line passing over the 2015 peak and several minor highs since January and those peaks created as a result will be viewed as rather significant should the market decline.
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.