FTSE 100 Trying to Keep its Footing on Major Support
- FTSE 100 testing major support around the 7400-area
- Needs to hold or else we could see a decline of significance set in
- A hold keeps the mid-May to current range in play
Yesterday, the FTSE 100 held the major 7400-area consisting of the 2013 top-side trend-line and several turning points since March; it’s a big spot we’ve discussed on numerous occasions. The reversal bar off support was only minor in significance, and thus far today we are seeing another attempt to push down into this all-important area. The fact we are seeing repeated tests recently increases the odds of support soon breaking. Should it fail to hold and a move develop below the 6/15 low at 7378, the market could be setting up for a material decline. The UK index will first need to break the June/’Brexit’ trend-line to further downside traction, but with a key focal point broken it may not take much to push it below trend-line support.
But before we can turn bearish we must respect support until broken. If we see a successful hold of support, we’ll look for a bounce back into the ongoing range since the middle of last month. From a risk/reward standpoint, current levels may offer an attractive opportunity for those traders looking to establish a long position. Looking higher, there aren’t any major points of selling interest until we get back towards this week’s high at 7561 and the January to March top-side trend-line.
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.